EXHIBIT 10.77
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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
THE DIABLO MANAGEMENT GROUP
AS ASSIGNEE FOR THE BENEFIT OF
CREDITORS OF WEBWARE CORPORATION
AND
WCORP, INC.
FOR THE ASSETS OF WEBWARE CORPORATION
DATED AS OF SEPTEMBER 4, 2003
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TABLE OF CONTENTS
PAGE
Article I DEFINITIONS............................................1
Section 1.1 Definitions............................................1
Section 1.2 Construction...........................................4
Article II PURCHASE AND SALE......................................4
Section 2.1 Purchase and Sale of Assets............................4
Section 2.2 Excluded Assets........................................5
Section 2.3 Assumed Liabilities....................................5
Section 2.4 Excluded Liabilities...................................6
Section 2.5 Assumption of Certain Contracts........................7
Article III PURCHASE PRICE.........................................7
Section 3.1 Purchase Price.........................................7
Section 3.2 Issuance and Delivery of Unregistered Shares...........8
Section 3.3 Registration of Stock..................................8
Section 3.4 Disposition of Shares..................................8
Article IV THE CLOSING............................................8
Section 4.1 Time and Place of the Closing..........................8
Section 4.2 Deliveries by Seller...................................8
Section 4.3 Deliveries by Buyer....................................9
Article V REPRESENTATIONS AND WARRANTIES OF SELLER...............9
Section 5.1 Authority Relative to this Agreement...................9
Section 5.2 No Conflict.............................................
Section 5.3 Required Filings and Consents.........................10
Section 5.4 Assets; Title.........................................10
Section 5.5 Intellectual Property.................................10
Section 5.6 Legal Proceedings and Judgments.......................10
Section 5.7 Compliance with Laws..................................10
Section 5.8 Assumed Agreements....................................10
Section 5.9 Assignee..............................................10
Section 5.10 Disclaimer of Other Representations and Warranties....11
Article VI REPRESENTATIONS AND WARRANTIES OF BUYER...............11
Section 6.1 Authority Relative to this Agreement..................11
Section 6.2 Consents and Approvals; No Violation..................11
Section 6.3 Legal Proceedings and Judgments.......................11
Section 6.4 Buyer Financing.......................................11
Article VII COVENANTS OF THE PARTIES..............................11
Section 7.1 Conduct of Business...................................11
Section 7.2 Access to Information; Maintenance of Records.........12
Section 7.3 Expenses..............................................13
Section 7.4 Further Assurances....................................13
Section 7.5 Public Statements.....................................13
Section 7.6 Governmental Authority Approvals and Cooperation......13
Section 7.7 Taxes.................................................14
Section 7.8 Power of Attorney; Right of Endorsement, Etc..........14
Section 7.9 Signage and Labels....................................15
Section 7.10 Post-Closing Funds....................................15
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TABLE OF CONTENTS
(continued)
Page
Article VIII CONDITIONS TO CLOSING.................................15
Section 8.1 Conditions to Each Party's Obligations to Effect
the Closing..........................................15
Section 8.2 Conditions to Obligations of Buyer....................15
Section 8.3 Conditions to Obligations of Seller...................15
Article IX TERMINATION AND ABANDONMENT...........................16
Section 9.1 Termination...........................................16
Section 9.2 Procedure and Effect of Termination...................16
Article X Indemnification; Remedies.............................17
Section 10.1 Indemnification and Reimbursement by Seller...........17
Section 10.2 Indemnification and Reimbursement by Buyer............17
Section 10.3 Time Period for Making Claims.........................17
Section 10.4 Survival..............................................17
Article XI MISCELLANEOUS PROVISIONS..............................17
Section 11.1 Amendment and Modification............................17
Section 11.2 Waiver of Compliance; Consents........................17
Section 11.3 No Impediment to Liquidation..........................17
Section 11.4 Notices...............................................18
Section 11.5 Assignment............................................18
Section 11.6 Severability..........................................19
Section 11.7 Governing Law.........................................19
Section 11.8 Submission to Jurisdiction............................19
Section 11.9 Counterparts..........................................19
Section 11.10 Incorporation of Exhibits.............................19
Section 11.11 Entire Agreement......................................19
Section 11.12 Remedies..............................................19
Section 11.13 Headings..............................................19
Section 11.14 Third Party Beneficiaries.............................19
SCHEDULES
Schedule 2.1(a) Purchased Assets (Assumed Agreements)
Schedule 2.1(c) Purchased Assets (Fixed Asset Detail)
Schedule 2.1(d) Purchased Assets (Intangible Personal Property)
Schedule 2.1(e) Purchased Assets (A/R Aging Summary)
Schedule 2.1(i) - 1 Purchased Assets (Prepaid Expenses)
Schedule 2.1(i) - 2 Purchased Assets (Deposits)
Schedule 2.2 Excluded Assets
Schedule 2.3 - 1 Assumed Liabilities (A/P Aging Detail)
Schedule 2.3 - 2 Assumed Liabilities (Equipment Leases)
Schedule 2.3 - 3 Assumed Liabilities (Accrued Expense Liability)
Schedule 2.5 Assumed Agreements
Schedule 2.5(e) Potential Assumed Agreements
Schedule 5.2 Conflicts
Schedule 5.3 Consents and Approvals
Schedule 5.4 Known Encumbrances (UCC-1 Search Results - Summary)
Schedule 7.1 Conduct of Business
Schedule 7.7 Allocation of Purchase Price
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TABLE OF CONTENTS
(continued)
EXHIBITS Page
Exhibit A Agreement and Assignment for the Benefit of Creditors
Exhibit B Form of Assumption Agreement
Exhibit C Form of Xxxx of Sale
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is made and entered
into as of this 3d day of September, 2003, by and between the Diablo Management
Group, a California corporation ("DMG"), as assignee for the benefit of the
creditors of WebWare Corporation, a Nevada corporation (the "COMPANY"), and
WCORP, Inc., a Delaware corporation ("BUYER").
WHEREAS, the Company's business relates to the design, development,
marketing, and sale of digital asset management software systems that provide a
media services platform for integrating rich media into content management
systems, marketing and communication portals, web publishing systems, and
e-commerce portals (the "BUSINESS");
WHEREAS, the Company assigned all or substantially all of its assets
related to the Business to DMG, for the benefit of the Company's creditors,
under the terms of that Agreement and Assignment for the Benefit of Creditors
dated September 4, 2003 (the "GENERAL ASSIGNMENT"), by and between the Company
and DMG, a duly executed copy of which is attached hereto as EXHIBIT A.
WHEREAS, in the case of those assets not otherwise transferable under
applicable law pursuant to the General Assignment, the Company has retained its
interest in such assets and those contractual rights and obligations related to
the Business;
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer, certain of Seller's assets related to the Business including
principally receivables, inventory, equipment, contracts, intellectual property,
real property interests, intangibles and other assets, as more particularly set
forth herein (as defined below), and to assume from Seller the Assumed
Liabilities pursuant to the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following
terms have the meanings specified in this Section 1.1(a).
"ACCOUNTS RECEIVABLE" means any and all accounts, accounts
receivable, notes, contract rights, drafts and other forms of claims, demands,
employee advances, instrument, receivables, trade accounts receivable and rights
to payment of money or other forms of consideration, whether for goods sold or
leased, services performed or to be performed, or otherwise, owned by Seller or
in which Seller has any interest, in each case in connection with the Business,
together with all guarantees, security agreements, collateral and rights and
interests securing the same and any interest or unpaid financing charges accrued
thereon as of the Closing Date.
"AFFILIATE" means, with respect to any specified Person, any other
Person that directly, or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person. For purposes of this definition, Affiliate means the power of one or
more persons to direct the affairs of the Person controlled by reason of
ownership of voting stock, contract or otherwise or the Purchased Assets.
"ASSIGNEE" means the assignee of all right, title and interest in and
to all tangible and intangible assets of every kind and nature, both real and
personal, and wherever situated of the Company pursuant to the General
Assignment for the benefit of the creditors of the Company and applicable law.
"ASSUMED AGREEMENTS" means all contracts, agreements, personal
property leases, commitments, understandings or instruments related to the
Business, including the Intellectual Property Agreements, and which are listed
on SCHEDULE 2.1 or SCHEDULE 2.5 attached hereto.
"ASSUMPTION AGREEMENT" means the Assumption Agreement to be executed
and delivered by Buyer and Seller at the Closing, substantially in the form of
EXHIBIT B attached hereto.
"XXXX OF SALE" means the Xxxx of Sale to be executed and delivered by
Seller to Buyer at the Closing, substantially in the form of EXHIBIT C attached
hereto.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which banks are required or authorized by law to be closed in San
Francisco, California.
"BUYER'S REPRESENTATIVES" means the Buyer's accountants, employees,
counsel, financial advisors and other authorized representatives.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONSENT" means, with respect to each Assumed Agreement set forth in
SCHEDULE 2.5(E), the written consent of the counter-party to said Assumed
Agreement to authorize the assumption and assignment of said Agreement to Buyer.
"ENCUMBRANCES" means any mortgages, hypothecations, pledges, liens,
claims (including options and rights of first refusal), charges, security
interests, conditional and installment sale agreements, activity and use
limitations, conservation easements, servitudes, deed restrictions, equitable
interests, exceptions to title, encumbrances and charges of any kind.
"FORCE MAJEURE EVENT" means the occurrence of (i) a natural
catastrophe (such as a fire, storm, flood, hurricane, earthquake, etc.), (ii) a
war, terrorist act, civil disturbance or other disruption of telecommunications,
power or essential services or (iii) any other event beyond the control of any
party hereto, in each case which has a material adverse effect on the prospects,
condition (financial or otherwise) or results of operations of the Business or
Seller's ability to consummate the transaction contemplated hereby.
"GOVERNMENTAL AUTHORITY" means any federal, municipal, state, county,
local, foreign or other governmental, administrative or regulatory authority,
department, agency, commission or body.
"INTELLECTUAL PROPERTY" means (a) all discoveries, innovations,
inventions and all improvements thereto and all classes and types of patents,
including, without limitation, utility models, utility patents and design
patents, and all patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all registered and unregistered trademarks, service
marks, trade dress and logos, including all goodwill associated therewith, and
all applications, registrations, and renewals in connection therewith, (c) all
works of authorship and all copyrights and moral rights therein, whether such
works are published or unpublished works, and all applications, registrations
and renewals in connection therewith, (d) all trade secrets, know-how, product
prototypes, and all proprietary, technical and non-technical data and
information, including, without limitation, customer lists, supplier lists,
pricing and cost information, business and marketing plans and other
confidential business information, (e) all computer programs and related code
and software other than commercially available "off-the-shelf" software, (f) all
domain name registrations and URL addresses, (g) all other recognizable
proprietary rights, and (h) all copies and tangible embodiments of the
foregoing, in each case related to and/or used in the Business and in each case
whether arising under the laws of the United States or any jurisdiction world
wide.
"INTELLECTUAL PROPERTY AGREEMENTS" means all (i) licenses of
Intellectual Property to the Company and (ii) licenses of Intellectual Property
by Seller or the Company to third parties that are related to the Business,
described on SCHEDULE 2.1.
"INTERIM BALANCE SHEET" means an unaudited balance sheet of the
Company as of July 31, 2003.
"INVENTORY" means the inventories, including inventory reserves, raw
materials, work in-process and finished products, of Seller related to and/or
used in the Business, including, without limitation, supplies, materials,
packaging, shipping containers and spare parts.
"LAWS" means any law, statute, regulation, rule, ordinance or Order
of a Governmental Authority.
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"ORDER" means any decree, injunction, judgment, order, ruling, writ,
quasi-judicial decision or award or administrative decision or award of any
Governmental Authority to which any Person is a party or that is or may be
binding on any Person or its securities, assets or business.
"PERMIT" means any license, permit, franchise, certificate of
authority or Order, or any waiver of the foregoing, required to be issued by any
Governmental Authority.
"PERSON" means any individual, corporation, partnership, limited
partnership, limited liability company, syndicate, group, trust, association or
other organization or entity or government, political subdivision, agency or
instrumentality of a government.
"RETAINED TRADE NAMES" means those trademarks, trademark
applications, trade names, corporate or other names related to the Business used
by the Company and which are not expressly set forth on SCHEDULE 2.1.
"SCHEDULES" means the Schedules attached to this Agreement and
forming a part of this Agreement.
"SEC" means the United States Securities and Exchange Commission.
"SECURED CREDITOR CONSENT" means that certain Secured Creditor
Consent dated as of September 4, 2003 by and among Seller, Buyer, SCP and the
Company.
"SELLER" means DMG, solely in its capacity as assignee for the
benefit of creditors of WebWare Corporation.
"SELLER'S REPRESENTATIVES" means Seller's accountants, employees,
counsel, financial advisors and other authorized representatives.
"TAX" and "TAXES" means all taxes, charges, fees, levies, penalties
or other assessments of any kind whatsoever imposed by any federal, provincial,
municipal, state, local or foreign taxing authority, including any interest,
penalties or additions attributable thereto.
"TAX RETURN" means any return, report, information return or other
document (including any related or supporting information) required to be
supplied to any Governmental Authority with respect to Taxes that are related to
the Business.
"UCC" means the Uniform Commercial Code as enacted in the applicable
jurisdiction.
"WARN ACT" means the Worker Adjustment and Retraining Notification
Act, as amended, 29 U.S.C. xx.xx. 2101 - 2109.
(b) Each of the terms set forth below shall have the
meaning ascribed thereto in the following Section:
DEFINITION LOCATION
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"AGREEMENT" Preamble
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"ALLOCATION" ss. 7.7(e)
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"ASSUMED LIABILITIES" ss. 2.3
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"BUYER" Preamble
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"CLAIMS SCHEDULE" ss. 3.3(a)
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"CLOSING DATE" ss. 4.1
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"CLOSING" ss. 4.1
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"CURE PAYMENTS" ss. 2.5(b)
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"EXCLUDED ASSETS" ss. 2.2
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"EXCLUDED CONTRACTS" ss. 2.2
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"EXCLUDED LIABILITIES" ss. 2.4
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"GENERAL ASSIGNMENT" Preamble
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"IMPROVEMENTS" ss. 2.1(c)
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"INSCI SHARES" ss. 3.1
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"INTANGIBLE PROPERTY" ss. 2.1(e)
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"PERSONAL PROPERTY" ss. 2.1(d)
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"PURCHASE PRICE" ss. 3.1
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"PURCHASED ASSETS" ss. 2.1
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"RECEIVABLES" ss. 2.1(f)
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"REGULATORY APPROVALS" ss. 7.6(a)
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"SCP" ss. 2.3(e)
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"SELLER" Preamble
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"SUPPORT AMOUNTS" ss. 2.5(c)
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"TERMINATION DATE" ss. 9.1(e)
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"TERMINATION PAYMENT" ss. 7.10
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"THIRD-PARTY SALE" ss. 7.10
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"TRANSACTION TAXES" ss. 7.7(a)
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Section 1.2 CONSTRUCTION. The terms "hereby," "hereto," "hereunder"
and any similar terms as used in this Agreement, refer to this Agreement in its
entirety and not only to the particular portion of this Agreement where the term
is used. The term "including," when used herein without the qualifier, "without
limitation," shall mean "including, without limitation." Wherever in this
Agreement the singular number is used, the same shall include the plural, and
the masculine gender shall include the feminine and neuter genders, and vice
versa, as the context shall require. The word "or" shall not be construed to be
exclusive. Provisions shall apply, when appropriate, to successive events and
transactions. Unless otherwise indicated, references to Articles and Sections
refer to Articles and Sections of this Agreement.
ARTICLE II
PURCHASE AND SALE
Section 2.1 PURCHASE AND SALE OF ASSETS. Upon the terms and subject
to the satisfaction of the conditions contained in this Agreement and in
reliance upon the representations and warranties of Seller and Buyer herein set
forth, at the Closing, Seller, as Assignee, shall sell, assign, convey, transfer
and deliver to Buyer, and Buyer shall, by payment of the Purchase Price,
purchase and acquire from Seller all of the right, title and interest that
Seller possesses as of the Closing in and to all of the Purchased Assets. For
purposes of this Agreement, the term "Purchased Assets" shall mean all goodwill,
assets, properties and rights of every nature, kind and description, whether
tangible or intangible, real, personal or mixed, wherever located and whether or
not carried or reflected on the books and records of Seller, primarily related
to the Business, including, without limitation, the following (but excluding the
Excluded Assets):
(a) all Assumed Agreements listed on SCHEDULE 2.1(A);
(b) all Intellectual Property, including, without limitation,
the Intellectual Property listed on SCHEDULE 2.1(B);
(c) all of those items of equipment and tangible personal
property, including, without limitation, the equipment and tangible personal
property listed on SCHEDULE 2.1(C), and any other tangible personal property
acquired by Seller after the date hereof but prior to the Closing Date, used
primarily in connection with the Business, (collectively, the "PERSONAL
PROPERTY");
(d) all intangible personal property, including, without
limitation, the intangible personal property listed on SCHEDULE 2.1(D), but only
to the extent of Seller's interest therein, together with all books, records and
like items pertaining primarily to the Business (collectively, the "INTANGIBLE
PROPERTY"), PROVIDED that the Intangible Property shall in all events exclude,
(i) any materials containing privileged communications or information about
employees, disclosure of which would violate any confidentiality agreement with
such employee or any policy of Seller regarding privacy of such information,
(ii) any materials which are subject to attorney-client or any other legal
privilege, and (iii) Seller's corporate minute books, stockholder records, all
Tax Returns, Form 5500 filings in connection with the 401-K plan and related
records;
(e) all Accounts Receivable as more fully set forth in
SCHEDULE 2.1(E), and, subject to SECTION 2.2, all causes of action relating or
pertaining to the foregoing (collectively, the "RECEIVABLES");
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(f) all Inventory;
(g) all operating data, files, general records, customer
lists, employee records, correspondence and other written records to the extent
relating to the Business and the Purchased Assets, wherever located;
(h) all of the goodwill of Seller associated with or relating
to the Business, the products sold by or on behalf of the Business and the
Intellectual Property;
(i) all prepaid and deferred items to the extent relating to
the Business and the Purchased Assets, including, without limitation, all
prepaid rentals, insurance premiums, and unbilled charges, fees and cash
deposits held by third parties, if any, and all rights of Seller relating to
deposits and prepaid expenses, claims for refunds and rights to offset in
respect thereof. Because Buyer is purchasing the contractual relationships
Seller has with its vendors and suppliers, Seller shall not pursue preference or
avoidance claims against Seller's suppliers or vendors;
(j) all insurance benefits including the rights and proceeds
arising from or relating to the Purchased Assets or the Assumed Liabilities
prior to the Closing, unless expended in accordance with this Agreement;
(k) all of the rights to the licenses, Permits, approvals,
clearances and authorizations relating to the Business, including any of the
foregoing obtained for Seller's benefit held in the name of third parties;
(l) all rights, claims, credits, judgments, choses in action,
rights of set-off or rights for past, present or future infringement against
third parties arising out of, relating to or in respect of the Business, the
Purchased Assets, the Assumed Agreements, the Intellectual Property, injury to
the goodwill associated with the Business or any trademark constituting
Intellectual Property or any confidentiality, non-disclosure, invention secrecy,
non-competition or non-solicitation obligation owed to Seller (whether such
obligation arises under an Assumed Agreement or otherwise), including, without
limitation, all causes of action, rights of recovery and rights of set-off of
any kind, all rights under express or implied warranties from suppliers to
Seller and all other interests in or claims, rebates, refunds or payments from
or against vendors; and
(m) all other properties and assets of every kind, character
and description, tangible or intangible, owned by Seller and used or held for
use in connection with the Business, whether or not similar to the items
specifically set forth above.
Section 2.2 EXCLUDED ASSETS. Notwithstanding any provision herein to
the contrary the Purchased Assets shall not include the following assets of
Seller (collectively, the "EXCLUDED ASSETS") and such assets shall remain the
property of Seller after the Closing: (i) those items excluded pursuant to the
provisions of SECTION 2.1 above; (ii) all cash and cash equivalents; (iii) any
lease, rental agreement, contract, agreement, license or similar arrangement
(collectively, the "Excluded Contracts", each an "Excluded Contract") which (A)
terminates or expires prior to the Closing Date in accordance with its terms or
in the ordinary course of the Business consistent with past custom and practice
or (B) is not an Assumed Agreement, an agreement listed on SCHEDULE 2.5(E) or
designated to be assigned to Buyer pursuant to SECTION 2.5(E); (iv) all
preference or avoidance claims and actions of the Seller, including, without
limitation, any such claims and actions arising under California Code of Civil
Procedure ss. 1800(b) and California Civil Code xx.xx. 3439.01 through 3439.09;
(v) Seller's rights under this Agreement, and all cash and non-cash
consideration payable or deliverable to Seller pursuant to the terms and
provisions hereof; (vi) insurance proceeds, claims and causes of action with
respect to or arising in connection with (A) any Excluded Contract which is not
assigned to Buyer at the Closing, or (B) any item of tangible or intangible
property not acquired by Buyer at the Closing; (vii) all tax refunds and
abatements either (A) related to Taxes either owing or paid, or (B) received in
connection with Tax Returns for periods on or prior to the Closing Date; and
(viii) Seller's right, title and interest to any assets related to the Business
set forth on SCHEDULE 2.2, if any.
Section 2.3 ASSUMED LIABILITIES. On the Closing Date, Buyer shall
execute and deliver to Seller the Assumption Agreement pursuant to which Buyer
shall assume and agree to pay, perform and discharge when due the following
liabilities and obligations of Seller (the "ASSUMED LIABILITIES"), as more
particularly set forth on SCHEDULE 2.3, in accordance with the respective terms
and subject to the respective conditions thereof:
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(a) any trade account payable and accrued expense liability
incurred by the Company reflected on the Interim Balance Sheet (other than a
trade account payable to any shareholder or a related Person of Seller or any
shareholder) that remains unpaid at and is not delinquent as of the Closing;
(b) any trade account payable incurred by the Company in the
ordinary course of business between the date of the Interim Balance Sheet and
the Closing that remains unpaid at and is not delinquent as of the Closing;
(c) any liability arising under the Assumed Agreements
described in Schedule 2.5;
(d) any liability arising under the Potential Assumed
Agreements described in Schedule 2.5(e), to the extent such Potential Assumed
Agreements have been assumed by or assigned to Buyer in accordance with Section
2.5(e);
(e) any liability to the Company's customers either incurred
by the Company in the ordinary course of business or obligated to be performed
under a customer agreement described in either Schedule 2.5 or 2.5(e); and
(f) the secured claim of WCORP, Inc., assigned to it by SCP
Private Equity Partners II, L.P. ("SCP"), with respect to: (i) that certain
Demand Promissory Note dated August 19, 2002 by WebWare Corporation in the
original principal amount of $1,000,000; (ii) that certain Demand Promissory
Note dated September 13, 2002 by WebWare Corporation in the original principal
amount of $200,000; and (iii) that certain Demand Promissory Note dated May 28,
2003 by WebWare Corporation in the original principal amount of $300,000.
Section 2.4 EXCLUDED LIABILITIES. Notwithstanding anything in this
Agreement to the contrary, in no event shall Buyer assume or be obligated to
pay, perform or otherwise discharge any liabilities or obligations of Seller
OTHER THAN the Assumed Liabilities (collectively, the "EXCLUDED LIABILITIES").
Excluded Liabilities shall remain the sole responsibility of and shall be
retained, paid, performed, and discharged solely by Seller. Excluded Liabilities
include, without limitation, the following:
(a) any liability or obligation associated with or related to
any Excluded Asset;
(b) any liability or obligation under any Assumed Agreement or
Potential Assumed Agreement, assumed or designated to be assumed by Buyer,
either at the Closing pursuant to Section 2.5 or after the Closing pursuant to
Section 2.5(e), that arises out of or relates to any breach or default other
than those listed on Schedule 2.3 or 2.5(e), that occurred prior to the Closing,
regardless of whether such claim or cause of action is commenced after the
Closing;
(c) any liability or obligation (including those arising under
the WARN Act) arising out of or resulting from layoffs of its employees,
including any obligation imposed on the Company or Buyer to provide such
employees with continued health, disability or life insurance or other benefits
(whether covered by insurance or not);
(d) any liability or obligation of Seller and the Company for
Taxes of any kind whatsoever payable with respect to the Purchased Assets and
the operation of the Business with respect to any period or portion thereof that
ends on or prior to the Closing Date (PROVIDED that, for this purpose, with
respect to any such Taxes that are payable with respect to a taxable period that
begins before the Closing Date and that ends after the Closing Date, the portion
of such Taxes allocable to the portion of such taxable period ending on the
Closing Date shall be considered to equal the amount of such Taxes for such
taxable period, multiplied by a fraction, the numerator of which is the number
of days in the portion of such taxable period ending on the Closing Date and the
denominator of which is the number of days in the entire taxable period);
(e) any liability or obligation with respect to any employee
of the Company;
(f) any liability or obligation for expenses relating to (i)
the negotiation and preparation of this Agreement and the transactions
contemplated herein and (ii) the assignment for the General Assignment, in each
case, to the extent incurred by Seller and including those related to their
legal counsel, accounting, brokerage and investment advisors fees and
disbursements;
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(g) any liability or obligation related to any shareholder
claims, litigation or proceeding against the Company; and
(h) any other liabilities or obligations which are not Assumed
Liabilities.
Section 2.5 ASSUMPTION OF CERTAIN CONTRACTS.
(a) The Assumed Agreements will be sold and assigned to Buyer
(or Buyer's designee) on the Closing Date. Seller shall use commercially
reasonable efforts to promptly comply with and perform any obligations under the
Assumed Agreements arising from and after the date hereof and through the
Closing Date.
(b) At the Closing, Seller shall assign to Buyer and Buyer
shall assume the Assumed Agreements set forth on SCHEDULE 2.5. If there exists
on the Closing Date any default under an Assumed Agreement, Buyer shall be
responsible for the payment of any and all amounts necessary to cure such
default as a condition to the Closing hereunder (the "CURE PAYMENTS"). SCHEDULE
2.5 sets forth the actual amounts necessary to cure defaults, if any, under each
of the Assumed Agreements as determined by Seller based on Seller's books and
records.
(c) In addition to the payment of the Purchase Price and the
payment of any Cure Payments, Buyer shall reimburse Seller in cash and in full
for the deposits, advances and credits and security deposits (the "SUPPORT
AMOUNTS") and replace the letters of credit, in all such cases, related to the
Assumed Agreements and set forth on SCHEDULE 2.5.
(d) To the extent that the assignment of any Assumed Agreement
or any Permit relating to the Business or the Purchased Assets shall require the
consent of any other party, this Agreement shall not constitute a contract to
assign the same if any attempted assignment would constitute a breach thereof.
In such case, Seller shall use commercially reasonable efforts, and the Buyer
shall cooperate where appropriate, to obtain any consent necessary to any such
assignment.
(e) In the case of each agreement identified on SCHEDULE
2.5(E) as to which Consent has not been obtained as of the Closing (each, a
"POTENTIAL ASSUMED AGREEMENT"), Buyer may elect to have Seller continue its
efforts to obtain the Consent with respect to certain of the Potential Assumed
Agreements.
(f) At any time, if Buyer elects to have Seller continue its
efforts to obtain any consent and the Closing occurs, notwithstanding Sections
2.1 and 2.3, neither this Agreement nor any other document related to the
consummation of the contemplated transaction hereunder shall constitute a
contract to assign the same if any attempted assignment would constitute a
breach of such Potential Assumed Agreement. In such case, Seller shall use
commercially reasonable efforts, and the Buyer shall cooperate where
appropriate, to obtain any Consent necessary to any such assignment. Once a
Consent for a Potential Assumed Agreement is obtained, Seller shall promptly
assign, transfer, convey, and deliver such Potential Assumed Agreement to Buyer,
and Buyer shall assume the obligations under such Potential Assumed Agreement
assigned to Buyer from and after the date of assignment.
(g) From the Closing Date until either (i) Consent for the
assignment a Potential Assumed Agreement is obtained or (ii) Buyer notifies
Seller in writing that it has abandoned its effort to obtain such Consent, Buyer
will be obligated to reimburse Seller in cash for any obligations associated
with the continued performance of such Potential Assumed Agreement. In the event
Buyer fails to pay Seller within 5 business days from the date of receipt of
Seller's request for reimbursement, which shall not be made more than once per
week, Seller may deem that Buyer has abandoned its effort to obtain Consent for
assignment of such Potential Assumed Agreement and cease to perform under such
agreement.
ARTICLE III
PURCHASE PRICE
Section 3.1 PURCHASE PRICE. In consideration for the Purchased
Assets, and subject to the terms and conditions of this Agreement, at the
Closing, Buyer shall: (a) assume the Assumed Liabilities, (b) assume the Assumed
Agreements; (c) pay to Seller an amount equal to $500,000 in cash; and (d)
deliver to Seller 7,162,041
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certificated common shares (INSS.OB) of Insci Corp., a Delaware corporation
(collectively, the "INSCI SHARES"), to be distributed to the creditors of the
Company pursuant to the General Assignment, the Secured Creditor Consent and
applicable law (collectively, the "PURCHASE PRICE"). On the Closing Date, Buyer
shall pay and deliver to DMG, by wire transfer of immediately available U.S.
funds, the cash portion of the Purchase Price.
Section 3.2 ISSUANCE AND DELIVERY OF UNREGISTERED SHARES. On or
before the Closing, Buyer will deliver to Seller the Insci Shares in accordance
with Section 3.1 to be delivered to the creditors of the Company in form and
manner as determined by the Assignee, in accordance with this Agreement, the
General Assignment, the Secured Creditor Consent and applicable law. Section 3.3
REGISTRATION OF STOCK.
(a) On or after 150 days from the date the General Assignment
becomes effective, Seller will deliver to Buyer a written schedule of creditors
of the Company with allowed claims and other persons or entities entitled to
payment pursuant to the General Assignment and applicable law (the "CLAIMS
SCHEDULE"). The Claims Schedule will include (i) the names of each person or
entity who is to receive a portion of the Insci Shares; (ii) the address for
each person or entity where such shares are to be delivered; and (iii) the
number of shares to be delivered to each person or entity, as determined by the
Assignee in accordance with the General Assignment, the Secured Creditor Consent
and applicable law.
(b) As soon as commercially practicable, but in no event later
than 30 days from the date Buyer receives the Claims Schedule, Buyer will file
an S3 with the SEC for the registration of the Insci Shares. Buyer will use its
best efforts to effectuate the registration of the Insci Shares.
(c) Upon the registration of the Insci Shares with the SEC,
Buyer will, as soon as is commercially practicable, deliver registered
certificated securities of the Insci Shares to Seller, or to parties whom Seller
designates, in the number of certificates and shares as requested by Seller,
which will equal the aggregate number of Insci Shares granted in accordance with
Section 3.1, for delivery by Seller or Seller's designee to those persons or
entities listed on the Claims Schedule, subject to those persons or entities
designated to receive a portion of the registered certificated Insci Shares,
each, entering into the applicable shareholder registration rights agreement and
accompanying lock up agreement, provided that such lock up agreement will
provide that those persons or entities who receive registered certificated
shares may sell their portion of the Insci Shares on the open market no later
than the 9 month anniversary of this Agreement.
(d) Upon receipt of such registered shares, Seller, and any
party designated by Seller, will deliver to Buyer the equivalent number of
unregistered Insci Shares to Buyer.
Section 3.4 DISPOSITION OF SHARES. Seller may, at its sole and
absolute discretion, sell some or all of the Insci Shares in its possession at
any time after the Closing pursuant to the General Assignment and applicable law
and subject to any applicable agreement.
ARTICLE IV
THE CLOSING
Section 4.1 TIME AND PLACE OF THE CLOSING. Upon the terms and subject
to the satisfaction of the conditions contained in ARTICLE VIII of this
Agreement, the closing of the sale of the Purchased Assets and the assumption of
the Assumed Liabilities and Assumed Agreements contemplated by this Agreement
(the "CLOSING") shall take place at the offices of Winston & Xxxxxx LLP, 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000, at 10:00 A.M.
(local time) no later than the First (1st) Business Day following the date on
which the conditions set forth in ARTICLE VIII have been satisfied (other than
the conditions with respect to actions the respective parties hereto will take
at the Closing itself) or, to the extent permitted, waived in writing, or at
such other place and time as Buyer and Seller may mutually agree. The date and
time at which the Closing actually occurs is herein referred to as the "CLOSING
DATE."
Section 4.2 DELIVERIES BY SELLER. At or prior to the Closing (or as
specifically provided in this SECTION 4.2), Seller shall deliver the following
to Buyer:
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(a) the Xxxx of Sale, duly executed by Seller, transferring
all of Seller's right, title and interest in and to the Purchased Assets,
including, without limitation, software, source code, test equipment, computers
and rights and claims under all confidentiality, non-disclosure, invention
secrecy, non-competition or non-solicitation obligations owed to them, and
adverse license agreements;
(b) all consents, waivers and approvals obtained by Seller
with respect to the sale, assignment, conveyance, transfer and delivery of the
Purchased Assets and the consummation of the transactions required in connection
with the sale of the Purchased Assets contemplated by this Agreement, to the
extent specifically required hereunder;
(c) the certificate contemplated by SECTION 8.2(B);
(d) certified copies of the resolutions duly adopted by the
Company's board of directors authorizing the execution, delivery and performance
of the General Assignment;
(e) certificate of Seller's secretary or other responsible
official certifying that the shareholders of the Company under applicable law
have given their consent to the General Assignment;
(f) the Assumption Agreement, duly executed by Seller and all
such other instruments of assignment or conveyance as shall be reasonably
necessary to transfer to Buyer all of Seller's right, title and interest in, to
and under all of the Purchased Assets in accordance with this Agreement (to be
delivered as of the close of business on the Closing Date);
(g) a Consent for the Assumed Agreements described as required
to be assigned to Buyer at the Closing, as set forth on SCHEDULE 2.5;
and
(h) such other instruments and documents as are necessary in
the opinion of Buyer in order to acquire the Purchased Assets.
Section 4.3 DELIVERIES BY BUYER. At or prior to the Closing (or as
specifically provided in this SECTION 4.3), Buyer shall deliver the following to
Seller:
(a) the portion of the Purchase Price due to be delivered to
Seller in accordance with SECTION 3.1, including, without limitation, delivery
of certain certificated shares of Insci Stock earmarked for the benefit of the
unsecured creditors of the Company;
(b) the Assumption Agreement, duly executed by Buyer, and all
such other instruments of assumption as shall be reasonably necessary for Buyer
to assume the Assumed Liabilities in accordance with this Agreement (to be
delivered as of the close of business on the Closing Date); and
(c) the certificate contemplated by Section 8.3(b).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
Section 5.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Seller has all
corporate power to execute and deliver this Agreement and has all corporate
authority necessary to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
board of directors and no other corporate proceedings on the part of Seller are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Seller, and assuming that this Agreement constitutes a valid and
binding agreement of Buyer, and constitutes a valid and binding agreement of
Seller, enforceable against Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium
or other similar laws affecting or relating to enforcement of creditors' rights
generally or general principles of equity.
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Section 5.2 NO CONFLICT. Except as described on SCHEDULE 5.2, neither
the execution and delivery of this Agreement by Seller, the performance of its
obligations hereunder nor the consummation of the transactions contemplated by
this Agreement will: (a) conflict with or result in any breach of any provision
of Seller's Certificate of Incorporation or Bylaws, (b) assuming that all
consents, approvals and notices contemplated by SECTION 5.3 have been obtained
and all filings described therein have been made (i) conflict with or violate
any Laws or Orders or other binding requirements of any Governmental Authority
applicable to Seller or by which its properties are bound or affected; or (ii)
result in any breach or violation of or constitute a default (or an event which
with notice or lapse of time or both could become a default) or result in the
loss of a material benefit under, or give rise to any right of termination,
amendment, acceleration or cancellation of, or result in the creation of an
Encumbrance on any of the properties or assets of Seller pursuant to, any note,
bond, contract, permit or other instrument or obligation to which Seller is a
party or by which Seller or any of its properties are bound or affected.
Section 5.3 REQUIRED FILINGS AND CONSENTS. Except as described on
SCHEDULE 5.3, neither the execution and delivery of this Agreement by Seller,
the performance of its obligations hereunder nor the consummation of the
transactions contemplated by this Agreement require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority which has not otherwise been obtained or made.
Section 5.4 ASSETS; TITLE. Seller has not previously transferred or
licensed any Purchased Assets other than in the ordinary course of business
consistent with past custom and practice. To the best of Seller's knowledge and
based on a reasonable inquiry of a national UCC search and subject to the
Secured Party Consent Agreement dated as of the Closing Date by SCP and to those
encumbrances listed on SCHEDULE 5.4, Seller has good, marketable and valid title
to the Purchased Assets and, at the Closing, Buyer shall acquire all of Seller's
right, title and interest in, to and under (subject to such being assumed and
assigned in accordance with SECTION 2.1), all of the Purchased Assets.
Section 5.5 INTELLECTUAL PROPERTY. Buyer acknowledges that some
assets described in SECTION 2.1 may contain third-party intellectual property
that may have been licensed by assignor or otherwise acquired by assignor. Buyer
understands that Seller is unable to transfer intellectual property belonging to
a third-party without the express written consent of that party, which will not
be obtained or sought by Seller as a part of this Agreement. Buyer shall accept
full responsibility for communicating with third-parties whose Intellectual
Property may be included in the Purchased Assets transferred hereby and shall
pay any and all licensing or other fees, costs, expenses or charges that may be
associated with using said assets.
Section 5.6 LEGAL PROCEEDINGS AND JUDGMENTS. To the best of Seller's
knowledge, there are no material claims, actions, proceedings or investigations
pending, threatened against or relating to Seller, the Business or the Purchased
Assets before any court or other Governmental Authority acting in an
adjudicative capacity that could have a material adverse effect on the Business.
Section 5.7 COMPLIANCE WITH LAWS. Seller is in compliance with all
Laws and Orders applicable to them, except for such failures to comply which
have not or would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the Business. The Business and
operations of Seller is not being operated by Seller in violation of any Laws or
Orders.
Section 5.8 ASSUMED AGREEMENTS. To the best of Seller's knowledge,
each Assumed Agreement is in full force and effect and is a valid and binding
obligation of Seller and the other parties thereto, enforceable in accordance
with its terms, except as enforceability may be affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law). To the best
of Seller's knowledge, except as set forth in SCHEDULE 2.5, no event has
occurred which (whether with or without notice or lapse of time or both) would
constitute a default by Seller under any Assumed Agreement or a default by any
other party thereto. True, correct and complete copies (or, if oral, written
summaries) of each Assumed Agreement has been made available to Buyer.
Section 5.9 ASSIGNEE. All rights of Seller with regard to the
ownership and possession of the Purchased Assets are rights held as Assignee
pursuant to the General Assignment made by the Company. Pursuant to the General
Assignment, the Company has informed Seller that it transferred all of the
Company's right, title and
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interest in and to the Purchased Assets to Seller. Pursuant to this Agreement,
Seller, solely in its capacity as Assignee, sells, assigns, and transfers all of
its right, title and interest in and to the Purchased Assets to Buyer.
Section 5.10 DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES.
EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE V, SELLER MAKES NO REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF ANY OF ITS
ASSETS (INCLUDING THE PURCHASED ASSETS), LIABILITIES OR OPERATIONS, INCLUDING,
WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, AND ANY
SUCH OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. BUYER
HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT TO THE EXTENT SPECIFICALLY SET FORTH
IN THIS ARTICLE V, BUYER IS PURCHASING THE PURCHASED ASSETS ON AN "AS-IS,
WHERE-IS" BASIS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER MAKES
NO REPRESENTATION OR WARRANTY REGARDING ANY ASSETS OTHER THAN THE PURCHASED
ASSETS, AND NONE SHALL BE IMPLIED AT LAW OR IN EQUITY.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
Section 6.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Buyer has all
corporate power and authority necessary to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate
proceedings on the part of Buyer. This Agreement has been duly and validly
executed and delivered by Buyer, and, assuming that this Agreement constitutes a
valid and binding agreement of Seller, constitutes a valid and binding agreement
of Buyer, enforceable against Buyer in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium
or other similar laws affecting or relating to enforcement of creditors' rights
generally or general principles of equity.
Section 6.2 CONSENTS AND APPROVALS; NO VIOLATION. Neither the
execution and delivery of this Agreement by Buyer, nor the purchase by Buyer of
the Purchased Assets and the assumption by Buyer of the Assumed Liabilities and
the Assumed Agreements pursuant to this Agreement will: (a) conflict with or
result in any breach of any provision of Buyer's Certificate of Incorporation or
Bylaws; (b) require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Authority which has not otherwise been
obtained or made; or (c) result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any material note, bond, mortgage, indenture, license, agreement,
lease or other instrument or obligation to which Buyer is a party or by which
any of its assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained.
Section 6.3 LEGAL PROCEEDINGS AND JUDGMENTS. There are no material
claims, actions, proceedings or investigations pending or, to Buyer's knowledge,
threatened against or relating to Buyer before any court or other Governmental
Authority acting in an adjudicative capacity that could have a material adverse
effect on Buyer's ability to consummate the transactions contemplated hereby.
Section 6.4 BUYER FINANCING. As of the date of this Agreement and on
the Closing Date, Buyer has and will have funds sufficient to pay the Purchase
Price and all of its fees and expenses incurred in connection with the
transactions contemplated hereby, including any applicable Transaction Taxes for
which Buyer shall have payment responsibility pursuant to SECTION 7.7 hereof.
ARTICLE VII
COVENANTS OF THE PARTIES
Section 7.1 CONDUCT OF BUSINESS. (a) Except as described on SCHEDULE
7.1, during the period commencing on the date of this Agreement and ending on
the Closing Date, Seller shall exercise commercially reasonable efforts, in each
case taking into account DMG's status as an assignee for the benefit of
creditors, (i) to operate the Business consistent with past custom and practice,
(ii) other than as permitted in writing by Buyer, to preserve, in all material
respects, the Business, the Purchased Assets, its employees and its operations,
and (iii) to
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preserve, in all material respects, the goodwill and relationships with
customers, suppliers and others having business dealings with the Business. In
the event Seller reasonably believes that it can no longer continue, or is
requested by a major creditor constituency to cease or terminate, any ongoing
business activities or practices which relates to the Purchased Assets, the
Business, the Assumed Agreements identified on SCHEDULE 2.5, or the potentially
Assumed Agreements identified on SCHEDULE 2.5(E), Seller will give Buyer as much
notice as reasonably practicable, but no less than three (3) business days and
Buyer shall have an opportunity (but not an obligation) to make arrangements to
undertake such activities or practices for its own account, to the extent
necessary to preserve the Business and the Purchased Assets.
(b) Prior to the Transfer Date, Seller shall (i) not sell,
lease (as lessor), transfer or otherwise dispose of any of the Purchased Assets
(other than the sale of Inventory in the ordinary course of business consistent
with past custom and practice, taking into account DMG's status as an assignee
for the benefit of creditors) and (ii) use good faith, commercially reasonable
efforts to prevent the abandonment of the Intellectual Property unless Seller
first obtains the written consent of Buyer approving any such abandonment.
(c) During the period commencing on the date of this Agreement
and ending on the Closing Date, Seller covenants that it will not, absent the
written consent of Buyer, (i) in the case of the Accounts Receivable, change the
terms of such Accounts Receivable in a manner that is inconsistent with current
practices or (ii) in the case of all sales subsequent to the date hereof,
provide for any customer or type of customer terms for sales that are
inconsistent with current practices for such customer or type of customer.
Section 7.2 ACCESS TO INFORMATION; MAINTENANCE OF RECORDS.
(a) Between the date of this Agreement and the Closing Date,
Seller shall, during ordinary business hours, upon reasonable notice, (i) give
Buyer and Buyer's Representatives reasonable access to all books, records,
offices and other facilities constituting the Purchased Assets to which Buyer is
not denied access by law, (ii) permit Buyer to make such reasonable inspections
thereof as Buyer may reasonably request, (iii) furnish Buyer with such financial
and operating data and other information with respect to the Business as Buyer
may from time to time reasonably request, (iv) furnish Buyer with detailed terms
of employment, including, without limitation, all information relating to
compensation and benefits, relating to each employee of the Business and (v)
permit Buyer to contact any employee of the Business regarding potential
employment with Buyer following the Closing; PROVIDED, HOWEVER, that (A) any
such access shall be conducted in such a manner so as not to interfere
unreasonably with the operation of the Business and shall be at the expense of
Buyer, (B) Seller shall not be required to take any action which would
constitute a waiver of the attorney-client privilege; (C) Seller need not supply
Buyer with any information which Seller is under a legal obligation not to
supply or any information, documents or materials related to customer-specific
costing and pricing information or product development and (D) Buyer shall be
under no obligation to offer employment to any employee of the Business
following the Closing. Notwithstanding anything in this SECTION 7.2 to the
contrary, Buyer shall not have access to any employee records or other personal
and medical records or other records, which in Seller's good faith judgment, are
sensitive or the disclosure of which could subject Seller to any risk of
liability.
(b) For a period of one hundred and eighty (180) days from the
Closing Date, Seller and Seller's Representative shall have reasonable access to
all of the books and records relating to the operation of the Business and the
Purchased Assets prior to the Closing Date, including all information pertaining
to the Assumed Agreements, in the possession of Buyer to the extent that such
access may reasonably be required by Seller in connection with the Assumed
Liabilities or the Excluded Liabilities, or other matters relating to or
affected by the operation of the Business and the Purchased Assets. Such access
shall be afforded by Buyer upon receipt of reasonable advance notice and during
normal business hours; PROVIDED, HOWEVER, that (i) any such access shall be
conducted in such a manner as not to interfere unreasonably with the operation
of the business of Buyer, (ii) Buyer shall not be required to take any action
which would constitute a waiver of the attorney-client privilege, and (iii)
Buyer need not supply Seller with any information which Buyer is under a legal
obligation not to supply. Seller shall be solely responsible for any costs or
expenses incurred by it pursuant to this SECTION 7.2(B). If Buyer shall desire
to dispose of any such books and records upon or prior to the expiration of such
period, Buyer shall, prior to such disposition, give Seller a reasonable
opportunity at Seller's expense, to segregate and remove such books and records
as Seller may select.
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Section 7.3 EXPENSES. Except to the extent specifically provided
herein, whether or not the transactions contemplated hereby are consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by the party incurring such
costs and expenses.
Section 7.4 FURTHER ASSURANCES.
(a) Subject to the terms and conditions of this Agreement,
each of the parties hereto shall use commercially reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
reasonably necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the sale of the Purchased Assets in accordance
with this Agreement, including using commercially reasonable efforts to ensure
(i) timely satisfaction of the conditions precedent to each party's obligations
hereunder and (ii) that the Purchased Assets transferred to Buyer comprise all
assets required for the continued conduct of the Business by Buyer as now being
conducted by Seller other than central corporate functions performed by the
Company or DMG on behalf of the Business and its other businesses. Neither
Seller, on the one hand, nor Buyer, on the other hand, shall, without the prior
written consent of the other party take any action which would reasonably be
expected to prevent or materially impede, interfere with, or delay the
transactions contemplated by this Agreement. From time to time, on or after the
Closing Date, Seller shall, at Buyer's expense, execute and deliver such
documents to Buyer as Buyer may reasonably request in order to more effectively
vest in Buyer Seller's title to the Purchased Assets. From time to time after
the date hereof, Buyer shall, at Seller's expense, execute and deliver such
documents to Seller as Seller may reasonably request in order to more
effectively consummate the sale of the Purchased Assets and the assumption and
assignment of the Assumed Liabilities and the Assumed Agreements in accordance
with this Agreement.
(b) In the event that any Purchased Asset shall not have been
conveyed to Buyer at the Closing, Buyer and Seller shall use their respective
commercially reasonable efforts to convey such Purchased Asset to Buyer as
promptly as is practicable after the Closing.
Section 7.5 PUBLIC STATEMENTS. Seller and Buyer shall consult with
each other prior to issuing any public announcement, statement or other
disclosure with respect to this Agreement or the transactions contemplated
hereby, except that the parties may make disclosures with respect to this
Agreement and the transactions contemplated hereby to the extent required by law
or by the rules or regulations of any securities exchange or commission.
Section 7.6 GOVERNMENTAL AUTHORITY APPROVALS AND COOPERATION.
(a) Seller and Buyer shall each use their commercially
reasonable efforts to cooperate with each other in determining and making any
filings, notifications and requests for approval required to be made and
received prior to the Closing under applicable law or regulation (collectively,
the "REGULATORY APPROVALS"). In connection with any Regulatory Approvals,
neither Buyer nor Seller will, and Buyer and Seller will use their commercially
reasonable efforts to cause their officers, directors, partners or other
Affiliates not to, take any action which could reasonably be expected to
materially and adversely affect the submission of any required filings or
notifications or the grant of any such approvals.
(b) Each party hereto (i) shall promptly inform each other of
any communication from any Governmental Authority concerning this Agreement, the
transactions contemplated hereby and any filing, notification or request for
approval related thereto and (ii) shall permit the other party hereto to review
in advance any proposed written communication or information submitted to any
such Governmental Authority in response thereto. In addition, neither Seller nor
Buyer shall agree to participate in any meeting with any Governmental Authority
in respect of any filings, investigation or other inquiry with respect to this
Agreement, the transactions contemplated hereby or any such filing, notification
or request for approval related thereto unless it consults with the other party
hereto in advance and, to the extent permitted by any such Governmental
Authority, gives the other party hereto the opportunity to attend and
participate thereat, in each case to the maximum extent practicable. Subject to
any restrictions under applicable laws, rules or regulations, Seller and Buyer
shall furnish Buyer or Seller, as the case may be, with copies of all
correspondence, filings and communications (and memoranda setting forth the
substance thereof) between it and its Affiliates and their respective
representatives on the one hand, and the Governmental Authority or members of
its staff on the other hand, with respect to this Agreement, the transactions
contemplated hereby (excluding documents and communications which are subject to
preexisting confidentiality agreements and to the attorney-client privilege or
work product doctrine) or any such filing, notification or request for approval
related thereto. Seller and Buyer shall also furnish the other party hereto with
such necessary information and assistance as such other party and its Affiliates
may reasonably request in connection with its preparation of necessary filings,
registration or submissions of information to the Governmental Authority in
connection with this Agreement, the transactions contemplated hereby and any
such filing, notification or request
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for approval related thereto. Seller and Buyer shall prosecute all required
requests for approval with all necessary diligence and otherwise use their
respective commercially reasonable efforts to obtain the grant thereof as soon
as possible.
Section 7.7 TAXES.
(a) PAYMENT OF TAXES. Buyer shall be liable for and shall be
allocated a pro rata share of the Taxes in respect of the Purchased Assets which
accrue after the Closing Date and shall pay such Taxes in a timely manner and
Seller shall be liable for and shall be allocated a pro rata share of the Taxes
in respect of the Purchased Assets which accrued on or before the Closing Date
(even though the Closing Date occurs in the midst of a taxable period) and shall
pay such Taxes in a timely manner.
(b) ALLOCATION OF TAXES. Buyer and Seller shall (i) attempt in
good faith, within thirty (30) days after the determination of the Purchase
Price pursuant to Article III, in the general form set forth on SCHEDULE 7.7, to
agree on the allocation of the sum of the Purchase Price and the Assumed
Liabilities (and any adjustments thereof) among the Purchased Assets as of the
Closing Date (the "ALLOCATION") in accordance with Section 1060 of the Code and
the Treasury Regulations thereunder and (ii) cooperate in connection with the
preparation of Internal Revenue Service Form 8594 for its timely filing. Except
as otherwise required by applicable law, Buyer and Seller shall report for all
Tax purposes all transactions contemplated by this Agreement in a manner
consistent with the Allocation, if any, and shall not take any position
inconsistent therewith in any Tax Return, in any refund claim, in any litigation
or otherwise. If thirty (30) days after the Closing Date, the parties have not
adopted an agreed allocation, any dispute related thereto shall be referred to,
and resolved by, the Independent Auditor within thirty (30) days after such
referral. The Independent Auditor's determination shall be conclusive and
binding upon the parties hereto and in such case used by the parties to prepare
their respective IRS Forms 8594 and used on their income Tax Returns. The costs,
expenses, and fees of the Independent Auditor shall be split between the Seller
and the Buyer. The Seller shall deliver to the Buyer for its records a copy of
the IRS Form 8594 used in the Seller's federal income Tax Return, and the Buyer
shall deliver to the Seller for its records a copy of the IRS Form 8594 used by
the Buyer on its federal income Tax Return.
(c) NO WITHHOLDING. Buyer shall pay the Purchase Price free
and clear of withholding or deduction for any Taxes.
(d) FIRPTA CERTIFICATION. Seller shall deliver to Buyer a
certification to the extent required under Section 1445 of the Code in
accordance with the Treasury Regulations thereunder.
(e) COOPERATION. Buyer and Seller agree to furnish or cause to
be furnished to each other, as promptly as practicable, such information and
assistance relating to Seller's operations as is reasonably necessary for the
preparation and filing of any Tax Return, for the preparation for and proof of
facts during any tax audit, for the preparation for any tax protest, for the
prosecution or defense of any suit or other proceeding relating to tax matters
and for the answer of any governmental or regulatory inquiry relating to tax
matters.
Section 7.8 POWER OF ATTORNEY; RIGHT OF ENDORSEMENT, ETC. Effective
as of the Closing, Seller hereby constitutes and appoints Buyer and its
successors and assigns the true and lawful attorney of Seller with full power of
substitution, in the name of Buyer or the name of Seller, on behalf of and for
the benefit of Buyer, (a) to collect all Purchased Assets, (b) to endorse,
without recourse, checks, notes and other instruments attributable to the
Purchased Assets, (c) to defend and compromise all actions, suits or proceedings
with respect to any of the Purchased Assets, (d) to institute and prosecute all
proceedings which Buyer may deem proper in order to collect, assert or enforce
any claim, right or title in or to the Purchased Assets and (e) to do all such
reasonable acts and things with respect to the Purchased Assets as Buyer may
deem advisable, subject to the consent of Seller, which consent shall not be
unreasonably withheld. Seller agrees that the foregoing powers are coupled with
an interest and shall be irrevocable by Seller directly or indirectly by the
dissolution of Seller or in any other manner. Buyer shall retain for its own
account any amounts lawfully collected pursuant to the foregoing powers and
Seller shall promptly pay to Buyer any amounts received by Seller after the
Closing with respect to the Purchased Assets to which Buyer may be entitled.
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Section 7.9 SIGNAGE AND LABELS. Buyer will remove Retained Trade
Names from all Purchased Assets and other items related to the Business as soon
as practicable but in any event within 60 days after the Closing Date. Buyer may
use Retained Trade Names on finished goods inventory that constitutes part of
the Purchased Assets but will change or otherwise replace the stamps and dies
bearing Retained Names as soon as practicable after the Closing Date. Buyer may
not use publicly any business records without first removing or obliterating all
portrayals or references to any of Retained Trade Names unless Seller consents
prior to such usage.
Section 7.10 POST-CLOSING FUNDS. Following the Closing Date, all
amounts, whether in the form of cash, proceeds, checks, drafts orders or other
instruments for the payment of money, received or recovered by Seller with
respect to the Business, the Purchased Assets or the Assumed Agreements shall
immediately upon receipt thereof by Seller be paid over and delivered in the
form received, but with any necessary endorsements or instruments required for
payment to Buyer, and, until so delivered shall not be commingled with any other
funds or property but shall be held by Seller upon an express trust for the
benefit of Buyer.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE
CLOSING. The respective obligations of each party to effect the sale and
purchase of the Purchased Assets shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions:
(a) no preliminary or permanent injunction, stay pending
appeal or other Order or decree by any federal or state court which prevents the
consummation of the sale of any material part of the Purchased Assets
contemplated hereby shall have been issued and remain in effect (each party
agreeing to use commercially reasonable efforts to have any such injunction,
Order or decree lifted) and no statute, rule or regulation shall have been
enacted by any Governmental Authority which prohibits the consummation of the
sale of the Purchased Assets; and
Any condition specified in this SECTION 8.1 may be waived by Buyer; PROVIDED
that no such waiver shall be effective against Buyer unless it is set forth in a
writing executed by Buyer.
Section 8.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of
Buyer to effect the purchase of the Purchased Assets and the assumption of the
Assumed Liabilities and Assumed Agreements contemplated by this Agreement shall
be subject to the fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) Seller shall have performed and complied in all material
respects with the covenants contained in this Agreement which are required to be
performed and complied with by Seller on or prior to the Closing Date and the
representations and warranties of Seller which are set forth in this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date (except to the extent that any such
representation or warranty speaks as of a particular date) as though made at and
as of the Closing Date;
(b) Buyer shall have received a certificate from the chief
executive officer of Seller, dated as of the Closing Date, to the effect that,
to the best of such chief executive officer's knowledge, the conditions set
forth in SECTION 8.2(A) have been satisfied;
(c) Since September 4, 2003, no event shall have occurred
which has had or would reasonably be expected to have, individually or in the
aggregate, a Force Majeure Event; and
(d) Buyer shall have received the other items to be delivered
to it pursuant to SECTION 4.2.
Any condition specified in this SECTION 8.2 may be waived by Buyer; PROVIDED
that no such waiver shall be effective against Buyer unless it is set forth in a
writing executed by Buyer.
Section 8.3 CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of
Seller to effect the sale of the Purchased Assets contemplated by this Agreement
shall be subject to the fulfillment at or prior to the Closing Date of the
following additional conditions:
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(a) Buyer shall have performed and complied in all material
respects with the covenants contained in this Agreement which are required to be
performed and complied with by Buyer on or prior to the Closing Date and the
representations and warranties of Buyer which are set forth in this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date (except to the extent that any such
representation or warranty speaks as of a particular date) as though made at and
as of the Closing Date; (b) Seller shall have received a certificate from an
authorized officer of Buyer, dated as of the Closing Date, to the effect that,
to the best of such officer's knowledge, the conditions set forth in SECTION
8.3(A) have been satisfied;
(c) Seller shall have received the other items to be delivered
to it pursuant to SECTION 4.3.
Any condition specified in this SECTION 8.3 may be waived by Seller; PROVIDED
that no such waiver shall be effective against Seller unless it is set forth in
a writing executed by Seller.
ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date by:
(a) mutual written consent of Seller and Buyer;
(b) Seller, if there has been a material violation or breach
by Buyer of any covenant, representation or warranty made by it contained in
this Agreement which has prevented the satisfaction of any condition to the
obligations of Seller to effect the Closing and such violation or breach has not
been cured by Buyer within ten (10) Business Days of receipt of written notice
thereof or is waived by Seller;
(c) Seller or Buyer, if (i) there shall be any law or
regulation that makes consummation of the transactions contemplated hereby
illegal or otherwise prohibited or (ii) there shall be any nonappealable final
Order, decree or judgment of any court or Governmental Authority having
competent jurisdiction which prohibits the consummation of the transactions
contemplated hereby or otherwise alters the terms and conditions of the
transactions contemplated hereby in any material respect;
(d) Buyer or Seller, if the Closing shall not have occurred on
or prior to September 4, 2003 (the "TERMINATION DATE"), unless extended by
mutual written agreement of Buyer and Seller; PROVIDED that Buyer or Seller, as
the case may be, shall not be entitled to terminate this Agreement pursuant to
this SECTION 9.1(D) if the failure of the Closing to occur on or prior to such
date results primarily from such party itself breaching any representation,
warranty or covenant contained in this Agreement;
(e) Buyer (i) if on or before September 4, 2003, an
involuntary bankruptcy is filed against Seller or if a trustee or a receiver is
appointed for Seller and if such trustee or receiver does not expressly consent
to and assume Seller's obligations under this Agreement on or prior to September
4, 2003; or
(f) Buyer, if there has been a material violation or breach by
Seller of any covenant, representation or warranty made by it contained in this
Agreement which has prevented the satisfaction of any condition to the
obligations of Buyer to effect the Closing and such violation or breach has not
been cured by Seller within ten (10) Business Days of receipt of written notice
thereof or is waived by Buyer.
Section 9.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of
termination of this Agreement and abandonment of the transactions contemplated
hereby by either or both of the parties pursuant to SECTION 9.1, written notice
thereof shall forthwith be given by the terminating party to the other party and
this Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further Order of the Bankruptcy Court and without further
action by any of the parties hereto. If this Agreement is terminated as provided
herein, all filings, applications and other submissions made pursuant to this
Agreement, to the extent practicable, shall be withdrawn from the agency or
other Person to which they were made.
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ARTICLE X
INDEMNIFICATION; REMEDIES
Section 10.1 INDEMNIFICATION AND REIMBURSEMENT BY SELLER. In the
event the Closing occurs, Seller shall not be obligated to indemnify, defend or
hold harmless Buyer and its stockholders, directors, officers, employees, agents
and Affiliates (collectively, the "Buyer Indemnities"), from and against any
loss, liability, claim, damage, expense (including costs of investigation and
defense and reasonable attorney's fees and expense) or diminution of value,
whether or not involving a third party claim (collectively, "DAMAGES") incurred
or suffered by the Buyer Indemnities arising or resulting, directly or
indirectly from the transactions in this Agreement.
Section 10.2 INDEMNIFICATION AND REIMBURSEMENT BY BUYER. In the event
the Closing occurs, Buyer shall have an obligation to indemnify, defend and hold
harmless Seller and its stockholders, directors, officers, employees, agents and
Affiliates (collectively, the "Seller Indemnities") from and against any and all
Damages, other than Damages related to an Excluded Liability, incurred or
suffered by the Seller Indemnities arising or resulting from, directly or
indirectly, any of the following:
(a) any breach of any representation or warranty made by Buyer
in this Agreement or in any certificate, document, writing or instrument
delivered by Buyer in connection with this Agreement;
(b) any breach of any covenant or obligation of Buyer in this
Agreement or in any other certificate, document, writing or instrument delivered
by Buyer pursuant to this Agreement; or
(c) any Assumed Liabilities.
Section 10.3 TIME PERIOD FOR MAKING CLAIMS. If the Closing occurs,
Buyer will have liability (for indemnification or otherwise) with respect to any
breach of (i) a covenant or obligation to be performed or complied with prior to
the Closing Date or (ii) a representation or warranty, only if on or before 150
days from the Closing Date, Seller notifies Buyer of a claim specifying the
factual basis of the claim in reasonable detail to the extent then known by
Seller. Other claims for indemnification by Buyer may be asserted by notice to
the Buyer and shall be paid promptly after such notice.
Section 10.4 SURVIVAL. The parties hereto agree that the
representations and warranties contained in this Agreement shall not survive the
Closing hereunder, and neither of the parties nor any of their respective
officers, directors, representatives, employees, advisors or agents shall have
any liability to the other after the Closing for any breach thereof. The parties
hereto agree that only the covenants contained in this Agreement to be performed
at or after the Closing Date shall survive the Closing hereunder, and each party
hereto shall be liable to the other after the Closing Date for any breach
thereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1 AMENDMENT AND MODIFICATION. This Agreement may be
amended, modified or supplemented only by written agreement of Seller and Buyer.
Section 11.2 WAIVER OF COMPLIANCE; CONSENTS. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with any
obligation, covenant or condition herein may be waived by the party or parties
entitled to the benefits thereof only by a written instrument signed by the
party or parties granting such waiver, but such waiver or failure to insist upon
strict compliance with such obligation, covenant, or condition shall not operate
as a waiver of, or estoppel with respect to any subsequent or other failure. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof. No waiver on the part of any party
of any such right, power or privilege, and no single or partial exercise of any
such right, power or privilege, shall preclude any further exercise thereof or
the exercise of any other such right, power or privilege.
Section 11.3 NO IMPEDIMENT TO LIQUIDATION. Nothing herein shall be
deemed or construed as to limit, restrict or impose any impediment to Seller's
right to liquidate, dissolve and wind-up its affairs and to cease all business
activities and operations at such time as it may determine following the
Closing.
-17-
Section 11.4 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given (i) when personally
sent/delivered, by facsimile transmission (with hard copy to follow) or sent by
reputable express courier or (ii) five (5) days following mailing by registered
or certified mail postage prepaid and return receipt requested. Unless another
address is specified in writing, notices, demands and communications to Seller
and Buyer shall be sent to the addresses indicated below:
(a) If to Seller, to:
The Diablo Management Group
0000 Xxxx Xxxxxx Xxxxx
Xxxxx 000
X.X. Xxx 0000
Xxx Xxxxx, XX 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Xxxxxx & Xxxxxx, P.C.
00000 Xxxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
(b) If to Buyer, to:
WCORP, Inc.
Two Westborough Business Park
000 Xxxxxxx Xxxxxxx,
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
with a copy to:
Xxxxxxx & Xxxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Section 11.5 ASSIGNMENT. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns and with respect to Seller,
any entity that may succeed to substantially all the assets of Seller, but
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by Buyer hereto, including by operation of law, without the
prior written consent of Seller; PROVIDED, HOWEVER, that this Agreement shall be
assignable by Buyer, without the prior written consent of Seller, to an
Affiliate of Buyer, so long as Buyer shall continue to remain obligated
hereunder. Any assignment of this Agreement or any of the rights, interests or
obligations hereunder in contravention of this SECTION 11.5 shall be null and
void and shall not bind or be recognized by Seller or Buyer.
-18-
Section 11.6 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other terms, conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
Section 11.7 GOVERNING LAW. This Agreement shall be governed by the
laws of the State of California, without giving effect to the principles of
conflicts of laws thereof, and by the laws of the United States of America.
Section 11.8 SUBMISSION TO JURISDICTION. Unless and to the extent
otherwise specifically provided herein, the parties hereto irrevocably submit to
the exclusive jurisdiction of a superior or district court sitting in the San
Francisco County (or any court exercising appellate jurisdiction over such
superior or district court) over any dispute arising out of or relating to this
Agreement or any other agreement or instrument contemplated hereby or entered
into in connection herewith or any of the transactions contemplated hereby or
thereby. Each party hereby irrevocably agrees that all claims in respect of such
dispute or proceedings may be heard and determined in such courts. The parties
hereby irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute or proceeding brought in such courts or any defense of inconvenient
forum in connection therewith.
Section 11.9 COUNTERPARTS. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which, when
executed and delivered, shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
Section 11.10 INCORPORATION OF EXHIBITS. All Schedules and all
Exhibits attached hereto and referred to herein are hereby incorporated herein
by reference and made a part of this Agreement for all purposes as if fully set
forth herein.
Section 11.11 ENTIRE AGREEMENT. This Agreement (including all
Schedules and all Exhibits) constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto.
Section 11.12 REMEDIES. Seller and Buyer hereby acknowledge and agree
that money damages may not be an adequate remedy for any breach or threatened
breach of any of the provisions of this Agreement and that, in such event,
Seller or its respective successors or assigns, or Buyer or its successors or
assigns, as the case may be, may, in addition to any other rights and remedies
existing in their favor, apply to any court of competent jurisdiction for
specific performance, injunctive and/or other relief in order to enforce or
prevent any violations of this Agreement.
Section 11.13 HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
Section 11.14 THIRD PARTY BENEFICIARIES. Nothing in this Agreement
shall confer any rights upon any Person other than the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written by their respective officers
thereunto duly authorized.
SELLER:
THE DIABLO MANAGEMENT GROUP,
SOLELY IN ITS CAPACITY AS ASSIGNEE FOR
BENEFIT OF CREDITORS OF WEBWARE
CORPORATION
By: /S/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman / COO
BUYER:
WCORP, INC.
By: /S/ XXXXX X. XXXXXX
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
TABLE OF SCHEDULES AND EXHIBITS
SCHEDULES
---------
Schedule 2.1(a) Purchased Assets (Assumed Agreements)
Schedule 2.1(c) Purchased Assets (Fixed Asset Detail)
Schedule 2.1(d) Purchased Assets (Intangible Personal Property)
Schedule 2.1(e) Purchased Assets (A/R Aging Summary)
Schedule 2.1(i) - 1 Purchased Assets (Prepaid Expenses)
Schedule 2.1(i) - 2 Purchased Assets (Deposits)
Schedule 2.2 Excluded Assets
Schedule 2.3 - 1 Assumed Liabilities (A/P Aging Detail)
Schedule 2.3 - 2 Assumed Liabilities (Equipment Leases)
Schedule 2.3 - 3 Assumed Liabilities (Accrued Expense Liability)
Schedule 2.5 Assumed Agreements
Schedule 2.5(e) Potential Assumed Agreements
Schedule 5.2 Conflicts
Schedule 5.3 Consents and Approvals
Schedule 5.4 Known Encumbrances (UCC-1 Search Results - Summary)
Schedule 7.1 Conduct of Business
Schedule 7.7 Allocation of Purchase Price
EXHIBITS
--------
Exhibit A Agreement and Assignment for the Benefit of Creditors
Exhibit B Form of Assumption Agreement
Exhibit C Form of Xxxx of Sale
SCHEDULE 2.1(A)
PURCHASED ASSETS (ASSUMED AGREEMENTS)
(ATTACHED)
SCHEDULE 2.1(C)
PURCHASED ASSETS (FIXED ASSET DETAIL)
(ATTACHED)
SCHEDULE 2.1(D)
PURCHASED ASSETS (INTANGIBLE PERSONAL PROPERTY)
(ATTACHED)
SCHEDULE 2.1(E)
PURCHASED ASSETS (A/R AGING SUMMARY)
(ATTACHED)
SCHEDULE 2.1(I) - 1
PURCHASED ASSETS (PREPAID EXPENSES)
(ATTACHED)
SCHEDULE 2.1(I) - 2
PURCHASED ASSETS (DEPOSITS)
(ATTACHED)
SCHEDULE 2.2
EXCLUDED ASSETS
No additional excluded assets
SCHEDULE 2.3 - 1
ASSUMED LIABILITIES (A/P AGING DETAIL)
(ATTACHED)
SCHEDULE 2.3 - 2
ASSUMED LIABILITIES (EQUIPMENT LEASES)
(ATTACHED)
SCHEDULE 2.3 - 3
ASSUMED LIABILITIES (ACCRUED EXPENSE LIABILITY)
(ATTACHED)
SCHEDULE 2.5
ASSUMED AGREEMENTS
(ATTACHED)
SCHEDULE 2.5(E)
POTENTIAL ASSUMED AGREEMENTS
1. See attached list of specific agreements.
2. All confidentiality, non-disclosure, invention secrecy,
non-competition or non-solicitation agreements related to the
Business.
3. All contracts, agreements, personal property leases, commitments,
understandings or instruments related to the Business, including the
Intellectual Property Agreements, and which not previously been
disclosed to Buyer.
SCHEDULE 5.2
CONFLICTS
No known exceptions
SCHEDULE 5.3
CONSENTS AND APPROVALS
No known required consent or approvals are required
SCHEDULE 5.4
KNOWN ENCUMBRANCES (UCC-1 SEARCH RESULTS - SUMMARY)
(ATTACHED)
SCHEDULE 7.1
CONDUCT OF BUSINESS
No known exceptions
SCHEDULE 7.7
ALLOCATION OF PURCHASE PRICE
(ATTACHED)
EXHIBIT A
AGREEMENT AND ASSIGNMENT FOR THE BENEFIT OF CREDITORS
(ATTACHED)
EXHIBIT B
FORM OF ASSUMPTION AGREEMENT
(ATTACHED)
EXHIBIT C
FORM OF XXXX OF SALE
(ATTACHED)
