Contract
Exhibit
10.1
between
ENTERPULSE,
INC.
a
Georgia
corporation;
and
PRIORITY
SOFTWARE, INC.
a
Nevada
corporation
Dated
as
of December 21, 2006
TABLE
OF CONTENTS
| 1. |
SALE
AND PURCHASE OF ASSETS; RELATED TRANSACTIONS.
|
1
|
|
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1.1
|
Sale
and Purchase of Assets
|
1
|
|
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1.2
|
Excluded
Assets
|
2
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|
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1.3
|
Purchase
Price
|
3
|
|
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1.4
|
Other
Terms of the Closing
|
3
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|
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1.5
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Non-Compete
|
5
|
|
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1.6
|
Non-Solicitation
|
7
|
|
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1.7
|
Right
to Purchase Equipment
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7
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|
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1.8
|
Sales
Agent Agreement
|
7
|
|
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1.9
|
Right
to Services of Xxxxx Xxxxx
|
7
|
|
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1.10
|
Finder’s
Fee
|
8
|
|
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1.11
|
Sales
and Transfer Taxes
|
8
|
|
|
1.12
|
Allocation
of Purchase Price
|
8
|
|
|
1.13
|
Closing
|
8
|
|
| 2. |
REPRESENTATIONS
AND WARRANTIES OF SELLER
|
9
|
|
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2.1
|
Title
to Assets
|
9
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|
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2.2
|
Specified
Clients
|
9
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|
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2.3
|
Specified
Contracts; Real Property Leases; Equipment; Certain
Materials
|
9
|
|
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2.4
|
Certain
Liabilities
|
10
|
|
|
2.5
|
Legal
Proceedings
|
10
|
|
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2.6
|
Technology
|
11
|
|
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2.7
|
Authority;
Binding Nature of Agreement
|
12
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2.8
|
Non-Contravention;
Consents
|
13
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| 3. |
REPRESENTATIONS
AND WARRANTIES OF PURCHASER.
|
13
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|
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3.1
|
Due
Organization
|
13
|
|
|
3.2
|
Compliance
with Legal Requirements
|
13
|
|
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3.3
|
Legal
Proceedings
|
13
|
|
|
3.4
|
Authority;
Binding Nature of Agreement
|
13
|
|
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3.5
|
Non-Contravention;
Consents
|
14
|
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| 4. |
PRE-CLOSING
COVENANTS OF SELLER.
|
15
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|
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4.1
|
Access
|
15
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|
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4.2
|
Conduct
of Business
|
15
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|
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4.3
|
Conditions
|
16
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| 5. |
PRE-CLOSING
COVENANTS OF PURCHASER.
|
16
|
|
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5.1
|
Access
|
16
|
|
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5.2
|
Consents;
Releases
|
16
|
|
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5.3
|
Conditions
|
16
|
|
| 6. |
CONDITIONS
PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE.
|
17
|
|
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6.1
|
Accuracy
of Representations
|
17
|
|
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6.2
|
Consents.
Seller will obtain the following Consents to the transactions contemplated
by this Agreement and the Assumption Agreement:
|
17
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|
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6.3
|
Performance
of Covenants
|
17
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|
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6.4
|
Additional
Documents
|
17
|
|
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6.5
|
No
Restraints
|
18
|
|
| 7. |
CONDITIONS
PRECEDENT TO SELLER'S OBLIGATION TO CLOSE.
|
18
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|
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7.1
|
Accuracy
of Representations
|
18
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|
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7.2
|
Performance
of Covenants
|
19
|
|
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7.3
|
Additional
Documents
|
19
|
|
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7.4
|
No
Restraints
|
19
|
|
| 8. |
TERMINATION.
|
20
|
|
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8.1
|
Right
to Terminate Agreement
|
20
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|
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8.2
|
Termination
Procedures
|
21
|
|
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8.3
|
Effect
of Termination
|
21
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|
| 9. |
INDEMNIFICATION.
|
21
|
|
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9.1
|
Survival
|
21
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|
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9.2
|
Indemnification
by Seller
|
21
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|
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9.3
|
Limitations
|
22
|
|
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9.4
|
Procedure
for Disposition of Claims
|
22
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|
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9.5
|
Notice
of Third-Party Claims; Assumption of Defense
|
23
|
|
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9.6
|
Settlement
or Compromise
|
25
|
|
|
9.7
|
Failure
of Indemnifying Person to Act
|
25
|
|
| 10. |
MISCELLANEOUS.
|
26
|
|
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10.1
|
Expenses
|
26
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|
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10.2
|
Amendment
|
26
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10.3
|
Notices
|
26
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|
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10.4
|
Waivers
|
28
|
|
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10.5
|
Counterparts
|
28
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|
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10.6
|
Interpretation.
|
28
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|
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10.7
|
Assignment.
|
29
|
|
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10.8
|
No
Third-Party Beneficiaries
|
29
|
|
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10.9
|
Further
Assurances
|
30
|
|
|
10.10
|
Severability
|
30
|
|
|
10.11
|
Remedies
Cumulative
|
30
|
|
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10.12
|
Entire
Understanding
|
30
|
|
|
10.13
|
Applicable
Law; Resolution of Disputes; Venue
|
30
|
|
|
10.14
|
Jurisdiction
of Disputes; Waiver of Jury Trial
|
31
|
|
TABLE
OF EXHIBITS AND SCHEDULES
|
Exhibit
A
|
Certain
Definitions
|
|
Exhibit
B
|
EnterConnect
Business Overview
|
|
Exhibit
C
|
Sales
Agent Agreement
|
|
Schedule
1.1
|
Specified
Assets
|
|
Schedule
1.2
|
Excluded
Assets
|
|
Schedule
1.8A
|
Subject
Equipment
|
|
Schedule
1.8B
|
Laptops
|
|
Schedule
2.3
|
Specified
Contracts
|
THIS
ASSET PURCHASE AGREEMENT (the “Agreement”) is being entered into as of
December 21, 2006, by and between ENTERPULSE,
INC., a Georgia corporation (“Seller”), and
PRIORITY SOFTWARE, INC., a Nevada
corporation (“Purchaser”). Seller and Purchaser are referred to
individually, from time to time in this Agreement, as the “Party”, and
collectively in this Agreement as the “Parties.” Certain other
capitalized terms used in this Agreement are defined in Exhibit A.
W
I T N E S S E T H:
WHEREAS,
Seller is the developer and owner of an asset portal enterprise software
product
called EnterConnect® as more fully described on Exhibit B (“EnterConnect”) which
provides an asset management and employee collaboration intranet software
systems and related applications.
WHEREAS,
Seller desires to sell and Purchaser desires to purchase
all of Seller’s rights, title and interest in EnterConnect and the related
assets and services as provided herein, pursuant to the terms and conditions
set
forth herein.
NOW,
THEREFORE, for good and valuable consideration, the sufficiency
and receipt of which the Parties acknowledge, the Parities hereto, intending
to
be legally bound, agree as follows:
1. SALE
AND PURCHASE OF ASSETS; RELATED TRANSACTIONS.
1.1 Sale
and
Purchase of Assets. On the terms and subject to the
conditions and other provisions set forth in this Agreement at the Closing,
Seller will sell and transfer to Purchaser, and Purchaser will purchase from
Seller, all of the following (which, subject to Section 1.2, are referred
to in
this Agreement as the “Specified Assets”):
1
(a) all
of Seller's rights and interests as of the Closing Date in and to the Specified
Assets which are listed on Schedule 1.1, including Seller Intellectual Property
Rights, equipment, service contracts, domain and internet rights and hardware
associated with EnterConnect;
(b) a
non-exclusive right as of the Closing Date to service the Specified Clients
pursuant to Section 2.2;
(c) those
records of Seller, as they exist on the Closing Date, relating exclusively
to
EnterConnect, and the Specified Assets (it being understood
that such records will not be subject to any restrictions on their use by
Purchaser and that Seller may, retain copies of such records);
and
(d) any
of the goodwill associated with EnterConnect and the Specified
Assets. All such Specified Assets that are in tangible form shall be
delivered to Purchaser on or
before
December 29,2006 (the "Delivery Date").
1.2 Excluded
Assets. Notwithstanding anything to the contrary contained
in Section 1.1, Seller will not be required to sell or transfer to Purchaser,
and the Specified Assets will not be deemed to include, any of the following
or
any right or interest in or to any of the following:
|
|
(a)
|
any
Specified Contract if (i) a Consent is required to be obtained
from any
Person in order to permit the sale or transfer to Purchaser of
Seller's
rights under such Specified Contract and (ii) such Consent shall
not have
been obtained;
|
|
|
(b)
|
cash,
cash equivalents or accounts
receivable;
|
|
|
(c)
|
any
interest or title in any real property or any assets located at
Seller’s
premises; or
|
2
|
|
(d)
|
any
asset identified on Schedule 1.2.
|
1.3 Purchase
Price.
(a) As
consideration for the sale of the Specified Assets to
Purchaser, Purchaser will pay to Seller the purchase price of One
Million Dollars ($1,000,000) the “Purchase Price”) by delivery of certified or
bank check, made to the order of Seller, or delivery of wire transfer to
an
account designated by Seller as follows: Five Hundred Thousand Dollars
($500,000), together with the sums set forth below, on the Closing Date;
and
Five Hundred Thousand Dollars ($500,000) on the Delivery
Date. Additionally, on the Closing Date, Purchaser will pay to Seller
the following:
(i) one
month rent and infrastructure support in the amount of Eight Thousand Five
Hundred Dollars ($8,500) for the Sublease of the premises
set forth in pursuant to Section 2.3(b);
(ii) the
purchase price of $6,730 for the equipment listed on Schedule 1.8A purchased
pursuant to Section 1.8;
(iii) the
reimbursement of the payment of salaries pursuant to Section 1.5(a) of those
employees listed in Section 1.5(a) in the amount of $34,752.48; and
(iv) the
advance payment of fees for work performed by Xxxxx Xxxxx pursuant to Section
1.10 in the amount of $16,000, for 160 hours of work to be
performed.
1.4 Other
Terms of the Closing.
(a) At
the Closing, Purchaser shall be permitted to offer employment to the following
employees or contractors of Seller, Xxxxxxx Xxxxx, Xxxxx Xxx,
Xxx Xxxxxxxxx, Xxx Xxxx, Xxxxxx Xxxxxx and Xxxx Xxxxxxx (the
“Assigned Employees”). Seller shall pay the salaries and related
payroll taxes of the Assigned Employees, excluding the salary and related
payroll taxes of Xxxxx Xxx, and Purchaser shall reimburse Seller these
amounts, for the period beginning December 16, 2006 and ending December 31,
2006.
3
(b) From
the Closing Date and for thirty (30) days thereafter, Purchaser shall have
the
right to use Seller’s Oracle and BEA Systems, Inc. licenses for Purchaser’s
internal purposes only. Purchaser will be required to cease using
such licenses within 30 days of the Closing Date.
(c) Post
closing Business Relationships. From the Closing Date until December
31, 2007 (the “Revenue Period”):
(i) If
Seller enters into a written agreement or statement of work on a project
for a
client of Seller which expressly provides for the use of EnterConnect, Seller
will pay Purchaser a sales commission of ten percent (10%) on payment received
from such client project and Purchaser shall retain one hundred percent (100%)
of maintenance and support received from such project if any;
(ii) If
Purchaser leads a sale in which services of Seller in excess of $50,000 at
Seller’s standard retail rates are included in the sale of an EnterConnect
System by Purchaser, Purchaser and Seller will establish the scope and pricing
of proposed services and Seller will have final control of the pricing of
all
sales that include Seller’s services in such a sale;
(iii) If
Purchaser leads a sale where no services of Seller are included in the sale
of
EnterConnect by Purchaser, whether through its VAR system or otherwise, Seller
will not receive a commission from the sale; and
(iv) Purchaser
shall only provide services that compete with the services
provided by Seller to the extent that such services are ancillary to an
installation of
an
EnterConnect system.
4
(d) Right
of First Refusal as a Service Provider. From the Closing Date
until
December
31, 2007, Purchaser will make Seller the first offer to provide software
modification and system integration-based
services for all customers who desire to purchase services related to
EnterConnect
from Purchaser for services in excess of $50,000.00. Seller is not
obligated to accept
such offer and may refuse to provide services for a customer of Purchaser
in its
discretion. Following
such a refusal, Purchaser may retain any other provider to fulfill services
on
behalf of its
customers. During this period, Seller may refer EnterConnect to its
customers where it deems it
appropriate.
(e) Purchaser
will retain the intellectual property rights for the services it provides
as
well as any services contracted from Seller in connection with an EnterConnect
engagement with Purchaser as provided for in this Section 1.5, except where
otherwise expressly provided herein.
1.5 Non-Compete. (a)
Seller agrees that it will not engage in the business of developing, marketing
and distributing, on its own or through a subsidiary, a product that competes
with EnterConnect, from the Closing Date through the fifth anniversary
thereof. Notwithstanding the preceding sentence but subject to
section 1.5(b), Seller shall have (i) the right to develop or sell any product,
software or solution that may be requested by a client or business partner
(including, but not limited to, BEA Systems, Inc.), whether or not it is
an
alternative to EnterConnect (an “Original Product”), and (ii) the perpetual
right to use all intellectual property necessary to continue to provide its
services and to exercise its rights pursuant to the preceding clause (i)
of this
sentence, including intellectual property identified on Schedule 1.1 and
all
other intellectual property related to EnterConnect whenever
developed. Except for the rights identified in the preceding
sentence, Seller shall not have any right to license or sell any rights to
EnterConnect or assert that it has any rights to EnterConnect, to any other
party except for those rights normally granted to a customer purchasing or
subscribing to EnterConnect. Seller will also have the perpetual
right to continue to use and maintain for internal purposes the version of
EnterConnect that it currently owns. Purchaser shall provide all
renewal upgrades and updates with respect to the system defined in Exhibit
B. Purchaser has the right to update the EnterConnect source code
with such updates that result from work performed after the Closing by Seller
for its previous EnterConnect clients where the agreement for such client
has
not been assumed by Purchaser, but only to the extent such update is consistent
with the terms of Purchaser’s standard VAR arrangement. Additionally,
Seller shall have no ownership rights to the intellectual property and other
proprietary rights developed in projects co-developed between Purchaser and
Seller following the Closing, but Enterpulse shall have continuing rights
to use
any such intellectual property in any manner that does not violate the covenants
above. Further, notwithstanding Seller’s right to develop an Original
Product as set forth within this Section 1.6, Seller, during the term of
this
period, shall have no right to market, distribute or sell an Original Product
or
any other product in violation of this Section 1.6, directly or indirectly,
except as set forth in this Section 1.6.
5
(b) Notwithstanding
that Seller may be entitled to take action under section 1.5(a), Seller agrees
to pay to Purchaser the following amounts in the following circumstances:
(i) if
Seller implements a standard deployment of EnterConnect on a BEA platform
(as
defined in the EnterConnect version 8.6 Deployment Guide) it will pay Purchaser
10% of the total fees received by it for such deployment, and (ii) if Seller
installs any of the following portlets on a BEA v8.1 platform it will pay
to
Purchaser the corresponding amounts per CPU:
Calendar $5,000;
Document
management $10,000; or
Web
Content Management $5,000
6
1.6 Non-Solicitation. Except
for Xxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxxxx Xxx, Xxxx XxXxxxxx, Xxx
Xxxx, Xxxxxx Xxxxxx and Xxxx Xxxxxxx, Purchaser will not, during the three
(3)
year period following the Closing Date, solicit for employment or employ
as an
employee or consultant any other employee or consultant of Seller without
the
express advance written consent of Seller.
1.7 Right
to Purchase
Equipment. Seller hereby grants Purchaser a right to
purchase, at Closing, any of Seller's equipment set forth on Schedule 1.8A
hereto, which is the equipment used in the development of EnterConnect, limited
to the extent that such equipment is currently solely dedicated to the support
of EnterConnect and not mutually supporting other operations of Seller, but
only
to the extent that Seller is legally entitled to sell such
equipment. The purchase price of such equipment is listed on Schedule
1.8A. Purchaser may use the laptops listed on Schedule 1.8B for
ninety (90) days after the Closing free of charge.
1.8 Sales
Agent Agreement. On the Closing Date, the
employment of Xxx Xxxxxxxxx with Seller shall terminate and Xxxxxxxxx and
Seller
will enter the Sales Agent Agreement set forth as Exhibit C hereto to provide
revenue generation, marketing solutions and partner related activities through
December 31, 2007 (the “Sales Agent Agreement”).
1.9 Right
to
Services of Xxxxx Xxxxx. Purchaser shall have the right to
contract for the services of Xxxxx Xxxxx through Seller from January 1, 2007
until March 31, 2007, at a rate of One Hundred Dollars ($100) per hour, for
forty hours a week. Purchaser shall pay for the first 4 weeks of
these hours, at Closing, whether or not such hours are used. Any such
base hours for subsequent periods must be paid for in advance on a monthly
basis. Hours in excess of 40 hours per week may be contracted for if
agreed to by Bassi and Seller. In addition, Purchaser shall pay all
travel expenses incurred by Bassi in connection with his service for
Purchaser. If such services include travel to the state of
California, Purchaser shall be charged an additional ten hours for flight
time
to and from California. Such travel to California shall be for no
more than five (5) consecutive business days per trip.
7
1.10 Finder’s
Fee. The Parties acknowledge that no broker helped
consummate this transaction or is entitled to consideration for
its.
1.11 Sales
and Transfer Taxes. Each Party shall bear and pay any sales
taxes, use taxes, transfer taxes, documentary charges, recording fees, filing
fees or similar taxes, charges, fees or expenses that may become payable
to such
Party in connection with the sale of the Specified Assets, the assumption
of the
Assumed Liabilities or any of the other transactions contemplated by this
Agreement.
1.12 Allocation
of Purchase Price. The Parties will use their best efforts
to agree upon an allocation of the Purchase Price among the Specified Assets
(the “Allocation”) as soon as possible after the Closing Date. The
Allocation will be determined in a manner consistent with this Section 1.13
and
Section 1060 of the Internal Revenue Code and the Treasury Regulations
thereunder.
1.13 Closing. The
closing of the purchase of the Specified Assets by Purchaser (the “Closing”)
will take place at the offices of Seller in Decatur, Georgia, at a time and
on a
date to be designated by Seller, which will be no more than three business
days
after the satisfaction or waiver of the last to be satisfied or waived of
the
conditions set forth in Sections 6 and 7 (other than those conditions that
by
their nature are to be satisfied at the Closing). For purposes of
this Agreement, “Closing Date” means the date as of which the Closing actually
takes place.
2. REPRESENTATIONS
AND WARRANTIES OF SELLER.
Seller
represents and warrants to Purchaser that, except as set forth in Seller
Disclosure Schedule:
8
2.1 Title
to Assets. As of the Closing Date, Seller will have good and
valid title to the Specified Assets free and clear of any liens or encumbrances,
except for (i) liens and encumbrances referred to in the Specified Contracts
and
(ii) minor liens and encumbrances that have arisen in the ordinary course
of
business and that do not materially detract from the value of the Specified
Assets subject thereto.
2.2 Specified
Clients. Seller has no ongoing maintenance agreements with
any clients relating to EnterConnect, but EnterConnect installations have
been
completed for Rush, Rheem, and Exide (the “Specified
Clients”). Purchaser and Seller shall each have the right to provide
any EnterConnect related support and maintenance services to the Specified
Clients in a manner consistent with the provisions of this Agreement and
with
the terms of Purchaser’s standard VAR arrangement.
2.3 Specified
Contracts; Real Property Leases; Equipment; Certain
Materials.
(a) Seller
has made available to Purchaser the form contracts identified on Schedule
2.3
used in connection with the Specified Assets. Purchaser and Seller
shall each have access to such clients for purposes of future marketing efforts
(so long as such efforts are in compliance with the provisions of this
Agreement, including section 1.5 of this Agreement). Purchaser shall be entitled
to make reference to such clients as its own in its marketing materials so
long
as the Seller is not referenced in any manner and the client has approved
of
such references.
9
(b) Purchaser
shall sublet from Seller 5000 square feet of office space and furnishings
in
Seller’s offices at 000 Xxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxxxxx three (3) months
following the Closing Date, with rent of Eight Thousand Five Hundred Dollars
($8500) per month ($7500 for office space and furnishings and $1000 for
infrastructure support provided by Seller which includes utilities, maintenance,
internet access and internet service), which amount shall be paid to Seller
on
the tenth day of each month. Purchaser shall also pay a deposit, in
the amount of one month rent ($8,500), at Closing. Any additional
time of Seller personnel required to support Purchaser infrastructure support
shall be charged at One Hundred and Fifty Dollars ($150) per hour. At
the end of such 90 day period, Purchaser and Seller may agree to extend the
term
of the sublease on mutually satisfactory terms.
2.4 Certain
Liabilities. As of the date of this Agreement except as set
forth herein, Seller has no liabilities relating to the Specified Assets,
other
than (i) liabilities incurred in the ordinary course of business or consistent
with past practices relating to the Specified Assets, (ii) liabilities
otherwise made known to or discovered by Purchaser in the course of Purchaser's
investigation of the Specified Assets, and (iii) liabilities that taken together
would not have a Material Adverse Effect.
2.5 Legal
Proceedings. There is no lawsuit or other legal proceeding
pending or, to Seller's knowledge, being overtly threatened against Seller
as of
the date of this Agreement that involves the Specified Assets and would
reasonably be expected to result in a judgment having a Material Adverse
Effect
on the value of the Specified Assets taken as a whole.
10
2.6 Xxxxxxxxxx.Xx
the Knowledge of Seller, as of the date hereof, Seller owns, co-owns or is
licensed or otherwise entitled to use all patents, trademarks, trade names,
service marks, copyrights, mask work rights, trade secret rights, and other
intellectual property rights and any applications therefor, and all mask
works,
net lists, schematics, technology, source code, know-how, computer software
programs and all other tangible information or material, that are used by
Seller
in connection with EnterConnect, other than freeware and other open source
software (the “Seller Intellectual Property
Rights”). Schedule 1.1 lists, as of the date hereof, (i)
all patents, registered copyrights, registered trademarks, registered service
marks, mask work rights, and any applications therefor, included in the Seller
Intellectual Property Rights; (ii) the jurisdictions in which each such Seller
Intellectual Property Right has been issued or registered or in which an
application for such issuance and registration has been filed, including
the
respective registration or application numbers; and (iii) which, if any,
of such
products have been registered for copyright protection with the United States
Copyright Office and any foreign offices. Schedule 1.1 also sets
forth a list of license agreements which, to Seller’s knowledge, constitutes all
license agreements under which Seller licenses as licensee the intellectual
property rights of third parties relating to technology or software which
is
incorporated in existing copies of EnterConnect. To Seller’s
knowledge, Seller is not in material violation of any such license
agreement. With respect to EnterConnect, Seller is not a party to,
nor is EnterConnect subject to (i) any joint venture contract or arrangement
or
any other agreement that involves a sharing of profits with other persons
other
than the payment or receipt of royalties by Seller; (ii) any agreement pursuant
to which Seller utilizes the intellectual property rights of others in any
products currently marketed by Seller and which is either non-perpetual or
terminable by the licensor thereof in the event of the Acquisition and which,
if
terminated, reasonably would be expected to have a Material Adverse
Effect. No claims with respect to the Seller Intellectual Property
Rights have been communicated in writing to Seller (i) to the effect that
the
manufacture, sale or use of EnterConnect as now used or offered by Seller
infringes on any copyright, patent, trade secret or other intellectual property
right of a third party or (ii) challenging the ownership or validity of any
of
the Seller Intellectual Property Rights, any or all of which claims reasonably
would be expected to have a Material Adverse Effect. To the Knowledge
of Seller, as of the date hereof, all patents and registered trademarks,
service
marks and registered copyrights held by Seller in connection with the Business
are valid and subsisting except for failures to be valid and subsisting that
reasonably would not be expected to have a Material Adverse
Effect. Seller does not know of any unauthorized use, infringement or
misappropriation of any of the Seller Intellectual Property Rights by any
third
party that reasonably would be expected to have a Material Adverse
Effect.
11
2.7 Authority;
Binding Nature of Agreement. Seller has all necessary
corporate power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement; and the execution, delivery
and
performance by Seller of this Agreement have been duly authorized by all
necessary action on the part of Seller and its board of directors and the
shareholders of Seller. Seller has provided to Purchaser a copy of
the resolutions adopted by its board of directors authorizing the execution,
delivery and performance by Seller of this Agreement. This Agreement
constitutes the valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, subject to (i) laws of general application
relating to bankruptcy, insolvency and the relief of debtors and (ii) rules
of
law governing specific performance, injunctive relief and other equitable
remedies.
2.8 Non-Contravention;
Consents. Except as set forth herein, the execution and
delivery by Seller of this Agreement and the sale of the Specified Assets
by
Seller to Purchaser will not: (i) materially contravene or result in a material
violation or breach of any Legal Requirement applicable to the Specified
Assets
or any Specified Contract; or (ii) result in the imposition of any lien or
encumbrance upon any of the Specified Assets. Except as set forth
herein, Seller is not required to obtain any Consent from any Person, under
any
material Specified Contract, at or prior to the Closing in connection with
the
execution and delivery of this Agreement or the sale of the Specified Assets
to
Purchaser.
3. REPRESENTATIONS
AND WARRANTIES OF PURCHASER.
Purchaser
represents and warrants to Seller as follows:
12
3.1 Due
Organization. Purchaser is a Nevada corporation, duly
organized, validly existing and in good standing in each jurisdiction where
its
is required to do so and has all requisite power and authority to own, operate
and lease its property and carry on its business as is now being
conducted.
3.2 Compliance
with Legal Requirements. Purchaser is in substantial compliance with
all applicable Legal Requirements.
3.3 Legal
Proceedings. There is no material pending or, to Purchaser's
knowledge, threatened lawsuit or other legal proceeding that involves Purchaser
or any of the assets owned or used by Purchaser.
3.4 Authority;
Binding Nature of Agreement. Purchaser has all necessary
power and authority to execute and deliver this Agreement, and to perform
its
obligations hereunder and thereunder; and the execution, delivery and
performance by Purchaser of this Agreement have been duly authorized by all
necessary action on the part of Purchaser and its board of
directors. Purchaser has provided to Seller a copy of the resolutions
of the boards of directors of Purchaser authorizing the execution, delivery
and
performance by Purchaser of this Agreement. No vote of the holders of
Purchaser Common Stock is required to authorize the purchase by Purchaser
of the
Specified Assets, or any of the other transactions contemplated by this
Agreement. This Agreement constitutes the valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with
its
terms, subject to (i) laws of general application relating to bankruptcy,
insolvency and the relief of debtors, and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies.
3.5 Non-Contravention;
Consents. Neither the execution, delivery or performance of
this Agreement nor the consummation of any of the transactions contemplated
by
this Agreement will: (i) conflict with or result in any violation of any
provision of the certificate of incorporation, bylaws or other charter or
organizational documents of any of the Purchaser Corporations, (ii) result
in a
breach or default by Purchaser under any material contract to which Purchaser
is
a party, (iii) result in a violation of any Legal Requirement or order to
which
Purchaser is subject or (iv) result in the creation of a lien or encumbrance
on
any material asset of Purchaser. Except as set forth herein Purchaser
will not be required to obtain any Consent from any Person in connection
with
the execution, delivery or performance of this Agreement or the consummation
of
any of the transactions contemplated hereby or thereby.
13
3.6 Purchaser
Fundraising Efforts. Purchaser acknowledges that neither the
Seller
nor any of its officers, directors, employees or representatives have had
any
involvement
whatsoever in any efforts by Purchaser to raise funds in connection with
the
transactions
contemplated by this Agreement, and that any information provided by or
involvement
in any such activities of Xxx Xxxxxxxxx was purely in his capacity as a
representative
of Purchaser and not of Seller. Purchaser agrees that it has not and will
not
make
any
contrary or inconsistent statement to any person or entity. Purchaser agrees
to
indemnify
and hold Seller harmless from any losses, damages, claims or expenses incurred
by
it
relating to or arising out of Purchaser’s fundraising efforts.
4. PRE-CLOSING
COVENANTS OF SELLER.
4.1 Access. Subject
to the provisions of applicable Legal Requirements, during the period from
the
date of this Agreement through the Closing Date (the “Pre-Closing Period”),
Seller will, after receiving reasonable advance notice from Purchaser, give
Purchaser reasonable access (during normal business hours) to Seller's books
and
records relating to the Specified Assets and will provide Purchaser with
such
information regarding the Specified Assets and any other appropriate matters
germane to the subject matter of this Agreement as Purchaser may reasonably
request, for the sole purposes of enabling Purchaser (i) to further investigate,
at Purchaser's sole expense, the Specified Assets, and any other appropriate
matters germane to the subject matter of this Agreement and (ii) to verify
the
accuracy of the representations and warranties set forth in Section
2.
14
4.2 Conduct
of Business. Except (i) as contemplated or permitted by this
Agreement, (ii) as may be necessary to carry out any of the transactions
contemplated by this Agreement, and (iii) as may be necessary to facilitate
compliance with any Legal Requirement or the requirements of any Specified
Contract, or (iv) as approved by Purchaser, during the Pre-Closing
Period:
(a) Seller
will (i) conduct its operations in the ordinary course and consistent with
its
past practices, to the extent such operations relate to the Specified Assets,
and (ii) use commercially reasonable efforts to maintain good relations with
the
parties to the Specified Contracts; and
(b) Seller
will not (i) license or dispose of any material Specified Assets, (ii)
prematurely terminate or materially amend, grant a sublicense under or assign
any of the Specified Contracts, or (iii) commit a material breach of any
Specified Contract or entered into after the date of this
Agreement.
4.3 Conditions. Seller
will use commercially reasonable efforts (i) to cause the conditions set
forth
in Section 6 to be satisfied on a timely basis and (ii) otherwise to cause
the
Closing to take place as soon as reasonably practicable.
5. PRE-CLOSING
COVENANTS OF PURCHASER.
5.1 Access. During
the Pre-Closing Period, Purchaser will, after receiving reasonable advance
notice from Seller, give Seller reasonable access (during normal business
hours)
to the Purchaser's books and records, and will provide Seller with such
information as Seller may reasonably request, for the sole purposes of enabling
Seller to verify the accuracy of the representations and warranties set forth
in
Section 3.
15
5.2 Consents;
Releases. Purchaser will cooperate with Seller, and will
provide Seller with such assistance as Seller may reasonably request, for
the
purpose of (i) attempting to obtain the Consents identified in Section 6.2
and
(ii) arranging for Seller to be released and discharged from its obligations
and
other liabilities under the Specified Contracts.
5.3 Conditions. Purchaser
will use commercially reasonable efforts (i) to cause the conditions set
forth
in Section 7 to be satisfied on a timely basis and (ii) otherwise to cause
the
Closing to take place as soon as reasonably practicable.
6. CONDITIONS
PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE.
The
obligation of Purchaser to purchase the Specified Assets and to take the
other
actions required to be taken by Purchaser at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Purchaser, in whole or in part, in
writing):
6.1 Accuracy
of Representations. Those representations and warranties of
Seller set forth in Section 2 that refer specifically to and are made as
of the
date of this Agreement shall have been accurate as of the date of this
Agreement, and all other representations and warranties of Seller set forth
in
Section 2 shall be accurate as of the Closing Date as if made on and as of
the
Closing Date provided, however, that, for purposes of this Section 6.1,
any inaccuracies in the representations and warranties of Seller will be
disregarded unless all such inaccuracies, considered collectively, have a
Material Adverse Effect on the value of the Specified Assets taken as a
whole.
16
6.2 Consents.
Seller will obtain the following Consent to the transactions contemplated
by
this Agreement and the Assumption Agreement:
(a) Silicon
Valley Bank.
6.3 Performance
of Covenants. Seller shall have performed, in all material
respects, all covenants required by this Agreement to be performed by Seller
on
or before the Closing Date.
6.4 Additional
Documents. Each of the following additional documents shall
have been delivered to Purchaser:
(a) a
certificate, executed by Xxxxxx X. Xxxxxxxx, confirming that, to the actual
knowledge of such executive officer, the conditions set forth in Sections
6.1
and 6.2 have been satisfied;
(b) such
bills of sale, assignments and other instruments as Seller may be required
to
execute in order to evidence and effectuate the transfer of the Specified
Assets
to Purchaser; and
(c) such
good standing certificates and other similar documents as Purchaser may
reasonably request to ensure that the actions required to be taken by Seller
at
the Closing have been properly authorized.
6.5 No
Restraints. No injunction or other order preventing the
consummation of the transactions contemplated by this Agreement shall have
been
issued since the date of this Agreement by any court of competent jurisdiction
and shall remain in effect; and no Legal Requirement that makes consummation
of
the transactions contemplated by this Agreement illegal shall have been enacted
or adopted since the date of this Agreement and shall remain in
effect.
17
7. CONDITIONS
PRECEDENT TO SELLER'S OBLIGATION TO CLOSE.
Seller's
obligation to sell and transfer the Specified Assets to Purchaser and to
take
the other actions required to be taken by Seller at the Closing is subject
to
the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by Seller, in whole or in part, in
writing):
7.1 Accuracy
of
Representations.
(a) The
representations and warranties set forth in Section 3 shall be accurate in
all
material respects as of the Closing Date as if made on and as of the Closing
Date.
(b) All
other representations and warranties of Purchaser set forth in Section 3
shall
be accurate as of the Closing Date as if made on and as of the Closing Date;
provided, however, that, for purposes of this Section 7.1(b), any
inaccuracies in the representations and warranties of Purchaser will be
disregarded unless all such inaccuracies, considered collectively, have a
material adverse effect on the business, assets (tangible or intangible),
liabilities or operations of the Purchaser Corporations.
7.2 Performance
of Covenants. Purchaser shall have performed, in all
material respects, all covenants required by this Agreement to be performed
by
Purchaser on or before the Closing Date.
7.3 Additional
Documents. Each of the following additional documents shall have been
delivered to Seller:
(a) a
certificate, executed by Xxxxxxx Xxxxxxxxx, confirming that, to the actual
knowledge of such executive officer, the conditions set forth in Sections
7.1
and 7.2 have been satisfied;
18
(b) such
good standing certificates and other similar documents as Seller may reasonably
request to ensure that the actions required to be taken by Purchaser and
Certified at the Closing have been properly authorized.;
and
(c) certificates
of Xxx Xxxxxxxxx, Xxxxxxx Xxxxx, Xxx Xxxx and Xxxx Xxxxxxx as to the
accuracy of the representations and warranties made by Seller in Section
2.6.
7.4 No
Restraints. No injunction or other order preventing the
consummation of the transactions contemplated by this Agreement shall have
been
issued since the date of this Agreement by any court of competent jurisdiction
and shall remain in effect; and no Legal Requirement that makes consummation
of
the transactions contemplated by this Agreement illegal shall have been enacted
or adopted since the date of this Agreement and shall remain in
effect.
8. TERMINATION.
8.1 Right
to Terminate Agreement. This Agreement may be terminated
prior to the Closing:
(a) by
the mutual written consent of the Parties;
(b) by
either Party (by delivery of a written termination notification in accordance
with Section 8.2) at any time after December 29, 2006, if the Closing has
not
taken place on or before December 29, 2006, unless the failure of the Closing
to
take place on or before such date is attributable to a breach by such Party
of
any of its obligations set forth in this Agreement;
(c) by
Seller (by delivery of a written termination notification in accordance with
Section 8.2) if (i) there shall have been a breach on the part of Purchaser
of
any of its representations, warranties or covenants such that the condition
set
forth in Section 7.1 or Section 7.2, as the case may be, would not be satisfied
as of the time of such breach, (ii) Seller shall have given written notice
of
such breach to Purchaser, (iii) at least ten (10) days shall have elapsed
since
the delivery of such written notice to Purchaser, (iv) such breach shall
not
have been cured and (v) Purchaser shall not be using its commercially reasonable
efforts to attempt to cure such breach; or
19
(d) by
Purchaser (by delivery of a written termination notification in accordance
with
Section 8.2) if (i) there shall have been a breach on the part of Seller
of any
of its representations, warranties or covenants such that the condition set
forth in Section 6.1 or Section 6.2, as the case may be, would not be satisfied
as of the time of such breach, (ii) Purchaser shall have given written notice
of
such breach to Seller, (iii) at least ten (10) days shall have elapsed since
the
delivery of such written notice to Seller, (iv) such breach shall not have
been
cured and (v) Seller shall not be using its commercially reasonable efforts
to
attempt to cure such breach.
8.2 Termination
Procedures. If either Party wishes to terminate this
Agreement pursuant to Section 8.1, such Party will deliver to the other Party
a
written termination notification stating that such Party is terminating this
Agreement and setting forth the basis for such termination.
8.3 Effect
of
Termination. Upon the termination of this Agreement pursuant
to Section 8.1, neither Party will have any obligation or other liability
to the
other Party, except that (i) the Parties will remain bound by the provisions
of
Section 10 and (ii) neither Party will be relieved of any liability for any
breach of its obligation to consummate the transactions contemplated by this
Agreement or its obligation to take any other action required to be taken
by
such Party at or before the Closing.
20
9. INDEMNIFICATION.
9.1 Survival. Except
as otherwise specified, the representations and warranties of Seller contained
herein shall survive the Closing for one (1) year after the Closing Date
(the
“Survival Date”).
9.2 Indemnification
by Seller. Subject to the
limitations on recourse and recovery set forth in this Section 9, from and
after
Closing, Seller (the “Indemnifying Person”) agrees to indemnify Purchaser (the
“Indemnified Person”) against, and agrees to hold it harmless from, any and all
Losses or claims incurred or suffered by it relating to or arising out of
or in
connection with any of the following (collectively, “Claims”):
(a) any
misrepresentation, breach of warranty, or any inaccuracy in any representation
or warranty made by Seller in this Agreement or in any document, certificate,
or
affidavit delivered by Seller pursuant to the provisions of this Agreement;
or
(b) any
breach of or failure by Seller to perform any covenant or obligation of such
party set out or contemplated in this Agreement or any document delivered
at the
Closing.
9.3 Limitations.
(a) Minimum
Loss. Purchaser shall not be entitled to be indemnified for Losses
pursuant to Section 9.2 unless and until the aggregate amount of all such
Losses
exceeds Fifty Thousand Dollars ($50,000) (the “Minimum Loss”). After
the Minimum Loss is exceeded, Purchaser shall be entitled to be paid the
entire
amount of any Losses pursuant to Section 9.2 in excess of (but not including)
the Minimum Loss.
(b) Limitation
of Loss; Sole and Exclusive Remedy. Purchaser and Seller acknowledge
and agree that, (i) after the Closing, notwithstanding any other provision
of
this Agreement to the contrary, the sole and exclusive remedy of Purchaser
with
respect to Claims for Losses or otherwise, including those set forth in Section
9.2, in connection with, arising out of or resulting from the subject matter
of
this Agreement and the transactions contemplated hereby and thereby shall
be in
accordance with, and limited solely to indemnification under, the provisions
of
this Section 9; (ii) the total liability of Seller to indemnify Purchaser
in
respect to Losses or otherwise pursuant to the provisions of Section 9.2
shall
be limited to $400,000, and (iii) notwithstanding clause (ii) hereof, the
total
liability of Seller to indemnify Purchaser in respect to Losses or otherwise
pursuant to the provisions of Section 1.5 shall be limited to
$1,000,000.
21
9.4 Procedure
for
Disposition of Claims.
(a) Promptly
(and in any event within five (5) days after the service of any citation
or
summons) after becoming aware of a claim for indemnification under this
Agreement, the Indemnified Person shall give notice to the Indemnifying Person
of such claim and the amount the Indemnified Person will be entitled to receive
hereunder from the Indemnifying Person; provided that the failure of the
Indemnified Person to promptly give notice shall not relieve the Indemnifying
Person of its obligations except to the extent (if any) that the Indemnifying
Person shall have been prejudiced thereby.
(b) If
the Indemnifying Person does not object in writing to such claim within ten
(10)
business days of receiving notice thereof, the Indemnified Person shall be
entitled to recover, on the fifteenth (15th) day
after such
notice was given, from the Indemnifying Person the amount of such claim,
and no
later objection by the Indemnifying Person shall be permitted.
(c) If
the Indemnifying Person agrees that he has an indemnification obligation
but
states that he is obligated to pay only a lesser amount, the Indemnified
Person
shall nevertheless be entitled to recover, on the fifteenth (15th) day
after such
notice was given, from the Indemnifying Person the lesser amount, without
prejudice to the Indemnified Person's claim for the difference.
22
9.5 Notice
of
Third-Party Claims; Assumption of Defense.
(a) Promptly
(and in any event within five (5) days after the service of any citation
or
summons) after becoming aware of any claim or the commencement of any suit,
action or proceeding made or brought by any Person not a party hereto, in
respect of which indemnity may be sought under this Agreement, the Indemnified
Party shall give notice thereof to the Indemnifying Party; provided, however,
that the failure of the Indemnified Person to promptly give notice shall
not
relieve the Indemnifying Person of its obligations except to the extent (if
any)
that the Indemnifying Person shall have been prejudiced thereby.
(b) The
Indemnifying Person may, at its own expense, assume control of any claim,
suit, action or proceeding, provided that:
(i) the
Indemnifying Person’s counsel is reasonably satisfactory to the Indemnified
Person;
(ii) the
Indemnifying Person shall thereafter consult with the Indemnified Person
upon
the Indemnified Person’s reasonable request for such consultation from time to
time with respect to such claim, suit, action or
proceeding.;
(iii) before
entering into any settlement, compromise, admission or acknowledgement of
the
validity of such claim, suit, action or proceeding if (i) the settlement
does
not unconditionally release the Indemnified Person from all liabilities and
obligations with respect to such claim, suit, action or proceeding, or (ii)
the
settlement could reasonably be expected to have a materially adverse impact
on
the Indemnified Person, the Indemnifying Person obtains the consent of the
Indemnified Person to enter into such settlement, compromise, admission or
acknowledgement; and
23
(iv) the
Indemnified Person shall be entitled to participate, at its own cost and
expense, in the defense of such claim, suit, action or proceeding and to
employ
separate counselof its choice for such purpose.
(c) If,
however, the Indemnified Person reasonably determines in its judgment that
representation by the Indemnifying Person’s counsel of both the Indemnifying
Person and the Indemnified Person would present such counsel with a conflict
of
interest, then such Indemnified Person may employ separate counsel to represent
or defend it in any such claim, action, suit or proceeding, and the Indemnifying
Person shall pay the reasonable fees and disbursements of such separate
counsel.
(d) Whether
or not the Indemnifying Person chooses to defend or prosecute any such claim,
suit, action or proceeding, all of the Parties hereto shall cooperate in
the
defense or prosecution thereof.
9.6 Settlement
or
Compromise.
(a) Any
settlement or compromise made or caused to be made by the Indemnified Person
or
the Indemnifying Person, as the case may be, of any claim, suit, action or
proceeding shall also be binding upon the Indemnifying Person or the Indemnified
Person, as the case may be, in the same manner as if a final judgment or
decree
had been entered by a court of competent jurisdiction in the amount of such
settlement or compromise; provided, however, that no obligation, restriction
or
Loss shall be imposed on the Indemnified Person as a result of such settlement
without its prior written consent.
(b) The
Indemnified Person will give the Indemnifying Person at least 30 days’ notice of
any proposed settlement or compromise of any claim, suit, action or proceeding
it is defending, during which time the Indemnifying Person may reject such
proposed settlement or compromise; provided, however, that from and after
such
rejection, the Indemnifying Person shall be obligated to assume the defense
of
and full and complete liability and responsibility for such claim, suit,
action
or proceeding and any and all Losses in connection therewith in excess of
the
amount of un-indemnifiable Losses which the Indemnified Person would have
been
obligated to pay under the proposed settlement or compromise.
24
9.7 Failure
of Indemnifying Person to Act. In the event that the Indemnifying
Person does not elect to assume the defense of any claim, suit, action or
proceeding, then any failure of the Indemnified Person to defend or to
participate in the defense of any such claim, suit, action or proceeding
or to
cause the same to be done, shall not relieve the Indemnifying Person of its
obligations hereunder.
10. MISCELLANEOUS.
10.1 Expenses.
Seller shall pay all expenses of Seller (including attorneys’ fees and
expenses), and Purchaser shall pay all expenses of Purchaser
(including attorneys’ fees and expenses), in each case incurred in connection
with this Agreement and the transactions contemplated hereby.
10.2 Amendment. This
Agreement may be amended, modified or supplemented but only in writing signed
by
each of the Parties hereto.
10.3 Notices.
(a) Any
notice, request, instruction or other document required by the terms of this
Agreement to be given to any other Party hereto shall be in writing and shall
be
given either:
(i) by
telephonic facsimile, in which case notice shall be presumptively deemed
to have
been given at the date and time displayed on the sender’s transmission
confirmation receipt showing the successful receipt thereof by the
recipient;
25
(ii) by
hand delivery or Federal Express or other method in which the date of delivery
is recorded by the delivery service, in which case notice shall be presumptively
deemed to have been given at the time that records of the delivery service
indicate the writing was delivered to the addressee;
(iii) by
prepaid telegram, in which case notice shall be presumptively deemed to have
been given at the time that the records of the telegraphic agency indicate
that
the telegram was telephoned or delivered to the recipient or addressee, as
the
case may be; or
(iv) by
U.S. mail to be sent by registered or certified mail, postage prepaid, with
return receipt requested, in which case notice shall be presumptively deemed
to
have been given forty-eight (48) hours after the letter was deposited with
the
United States Postal Service.
(b) Notice
shall be sent:
If
to the
Seller, to:
Enterpulse,
Inc.
000
Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with
a
copy (which shall not constitute notice) to:
Xxxxxxxxxx Xxxxxxxx
LLP
0000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Tel: (000)
000-0000
Fax: (000)
000-0000
If
to
Purchaser, to:
Priority
Software, Inc.
c/o
Private Capital Group
000
X. 00
Xxxxxx, Xxxxx 000
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
Tel:
(000) 000-0000
Fax:
(000) 000-0000
26
with
a
copy (which shall not constitute notice) to:
Xxxxx Xxxxxxxxxxx,
Esq.
Levy
& Boonshoft, P.C.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Tel: (000)
000-0000
Fax: (000)
000-0000
or
to
such other address as a Party may have specified in writing to the other
Parties
using the procedures specified above in this Section.
10.4 Waivers.
(a) The
failure of a Party hereto at any time or times to require performance of
any
provision hereof shall in no manner affect its right at a later time to enforce
the same.
(b) No
waiver by a Party of any condition or of any breach of any term, covenant,
representation or warranty contained in this Agreement shall be effective
unless
in writing, and no waiver in any one or more instances shall be deemed to
be a
further or continuing waiver of any such condition or breach in other instances
or a waiver of any other condition or breach of any other term, covenant,
representation or warranty.
10.5 Counterparts. This
Agreement may be executed in one or more counterparts, and by different Parties
hereto in separate counterparts, each of which when so executed shall be
deemed
an original, but all of which together shall constitute one and the same
instrument.
10.6 Interpretation.
(a) The
headings preceding the text of Articles and Sections included in this Agreement
and the headings to Exhibits attached to this Agreement are for convenience
only
and shall not be deemed part of this Agreement or be given any effect in
interpreting this Agreement.
27
(b) The
use of the masculine, feminine or neuter gender herein shall not limit any
provision of this Agreement. The use of the terms “including” or “include” shall
in all cases herein mean “including, without limitation” or “include, without
limitation”, respectively.
(c) Underscored
references to Articles, Sections, Subsections, Schedules or Exhibits shall
refer
to those portions of this Agreement.
(d) Consummation
of the transactions contemplated herein shall not be deemed a waiver of a
breach
of or inaccuracy in any representation, warranty or covenant or of any party's
rights and remedies with regard thereto.
(e) No
specific representation, warranty or covenant contained herein shall limit
the
generality or applicability of a more general representation, warranty or
covenant contained herein.
(f) A
breach of or inaccuracy in any representation, warranty or covenant shall
not be
affected by the fact that any more general or less general representation,
warranty or covenant was not also breached or inaccurate.
10.7 Assignment.
(a) This
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their respective estates, heirs, legal representatives, successors and
assigns.
(b) No
assignment of any rights or obligations hereunder may be made by the Parties,
Seller or by the Company without the prior written consent of the
other.
10.8 No
Third-Party Beneficiaries. This Agreement is solely for the
benefit of the Parties hereto and, to the extent provided herein, their
respective estates, heirs, successors, Affiliates, directors, officers,
employees, agents and representatives, and no provision of this Agreement
shall
be deemed to confer upon other third parties any remedy, claim, liability,
reimbursement, cause of action or other right.
28
10.9 Further
Assurances. Upon the reasonable request of Purchaser,
Seller will on and after the Closing Date execute and deliver to the Buyer
such
other documents, releases, assignments and other instruments as may be
required
to effectuate completely the transfer and assignment to Purchaser of, and
to vest fully in Purchaser title to, the Shares, and to otherwise carry out
the purposes of this Agreement.
10.10 Severability. If
any provision of this Agreement shall be held invalid, illegal or unenforceable,
the validity, legality or enforce ability of the other provisions hereof
shall
not be affected thereby, and there shall be deemed substituted for the
provision
at issue a valid, legal and enforceable provision as similar as possible
to the
provision at issue.
10.11 Remedies
Cumulative. Unless otherwise specified, the remedies
provided in this, Agreement shall be cumulative and shall not preclude
the
assertion or exercise of any other rights or remedies available by law,
in
equity or otherwise.
10.12 Entire
Understanding. This Agreement sets forth the entire
agreement and understanding of the Parties hereto and supersedes any and
all
prior agreements, arrangements and understandings among the
Parties.
10.13 Applicable
Law; Resolution of Disputes; Venue.
(a) This
Agreement shall be governed by and construed and enforced in accordance
with the
internal laws of the State of New York, without giving effect to the, principles
of conflicts of Law thereof.
29
(b) The
Parties hereto irrevocably agree and consent that all disputes concerning
this
Agreement or any claim or issue of any nature (whether brought by the Parties
hereto or by any other person whatsoever) arising from or relating to this
Agreement or to the corporate steps taken to enter into it (including,
without
limitation, claims for alleged fraud, breach of fiduciary duty, breach
of
contract, tort, etc.) which cannot be resolved within reasonable time through
discussions between the opposing entities (the “Disputed Matters”), shall be
resolved solely and exclusively by means of arbitration to be conducted
in New
York, New York, by a panel of three arbitrators. The initiating
parties acting jointly, on the one hand, and the responding parties acting
jointly, on the other hand, shall each appoint one arbitrator within fourteen
(14) days after written notice has been given by the initiating
parties. The two arbitrators so appointed shall designate the third
arbitrator by mutual agreement within 30 days after the arbitration notice
is
given. If the two arbitrators so appointed fail to designate the
third arbitrator within such period, then any party may request the Arbitral
Body to appoint the third arbitrator within fourteen (14) days after such
request. The arbitration procedure may be initiated by any of the
parties to this Agreement by written notice to the other party to the Disputed
Matter. Any notice will specify in reasonable detail the dispute
being submitted to arbitration.
(c) The
arbitrators will conduct the arbitration in accordance with the Commercial
Arbitration Rules (the “Rules”) of the American Arbitration Association (or any
successor organization thereto), including the Optional Rules for Emergency
Measures of Protection, then in force for resolution of commercial disputes,
provided that the provisions of this Agreement will prevail in the event
of any
conflict between the Rules and the provisions of this Agreement.
(d) The
Arbitrators themselves shall have the right to determine and to arbitrate
the
threshold issue of arbitrability itself, the decision of the Arbitrators
shall
be final, conclusive, and binding upon the opposing entities, and a judgment
upon the award may be obtained and entered in any federal or state court
of
competent jurisdiction.
30
(e) Each
entity or Party involved in litigation or arbitration shall be responsible
for
its own costs and expenses of any litigation or arbitration proceeding,
including its own attorney's fees (for any litigation, arbitration, and
any
appeals).
10.14 Jurisdiction
of Disputes; Waiver of Jury Trial. In the event any party to
this Agreement commences any proceeding or other legal action in connection
with
or relating to this Agreement, or any matters described or contemplated
herein
or therein, with respect to any of the matters described or contemplated
herein
or therein, the Parties to this Agreement hereby:
(a) agree
as an alternative method of service to service of process in any legal
proceeding by mailing of copies thereof to such party at its address set
forth
here in for communications to such party;
(b) agree
that any service made as provided herein shall be effective and binding
service
in every respect; and
(c) agree
that nothing herein shall affect the rights of any party to effect service
of
process in any other manner permitted by Law; and EACH PARTY
HERETO WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY DISPUTE IN CONNECTION
WITH OR
RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED
OR
CONTEMPLATED HEREIN OR THEREIN, AND AGREE TO TAKE ANY AND ALL ACTION NECESSARY
OR APPROPRIATE TO EFFECT SUCH WAIVER.
31
IN
WITNESS WHEREOF, the Parties hereto have executed this Asset Purchase
Agreement as of the date set forth herein.
|
ENTERPULSE,
INC.
|
|||
|
By:
|
/s/
Xxxxxx X. Xxxxxxxx
|
||
|
Name:
|
Xxxxxx X. Xxxxxxxx
|
||
|
Title:
|
Chief
Executive Officer
|
||
|
PRIORITY
SOFTWARE, INC.
|
|||
|
By:
|
/s/
Xxxxxxx Xxxxxxxxx
|
||
|
Name:
|
Xxxxxxx Xxxxxxxxx
|
||
|
Title:
|
Chairman
|
||
EXHIBIT
A
CERTAIN
DEFINITIONS
For
purposes of the Agreement:
“Agreement”
means the Asset Purchase Agreement to which this Exhibit A is
attached.
“Allocation”
has the meaning set forth in Section 1.5.
“Assumed
Liabilities” means the following obligations and other
liabilities (whether known, unknown, accrued, absolute, matured, unmatured,
contingent or otherwise, and whether arising before or after the Closing)
as
they may exist at and/or after the Closing: (i) all obligations and other
liabilities of Seller under or relating to the Specified Assets, and (ii)
each
other obligation or other liability of Seller relating to any of the Specified
Assets.
“Closing”
has the meaning set forth in Section 1.14.
“Closing
Date” has the meaning set forth in Section
1.14.
“Consent”
means any consent, approval or waiver.
“Legal
Requirement” means any law, rule or regulation of any
governmental body.
“Loss”
and “Losses” means, with respect to Purchaser, any damage,
liability, demand, claim, action, cause of action, cost, damage, deficiency,
tax, penalty, fine or other loss or expense, whether or not arising out of
a
third party claim, including all interest, penalties, reasonable attorneys’ fees
and expenses and all amounts paid or incurred in connection with any action,
demand, proceeding, investigation or claim by any third party (including
any
governmental entity or any department, agency or political subdivision thereof)
against or affecting Purchaser or which, if determined adversely to Purchaser
would give rise to evidence of the existence of, or relate to, any other
Loss
and the investigation, defense or settlement of any of the
foregoing.
“Material
Adverse Effect” means any effect or change that would be materially
adverse to the business, assets, condition (financial or otherwise), operating
results or operations of Purchaser, or on the ability of any Party to consummate
timely the transactions contemplated herein.
“Matter”
means any claim, demand, dispute, action, suit, proceeding, investigation
or
other similar matter.
“Parties”
has the meaning set forth in the introductory paragraph of the
Agreement.
“Person”
means any individual, corporation, general partnership, limited partnership,
limited liability company, trust, association, firm, organization, company,
business, entity, union, society or governmental body.
“Pre-Closing
Period” has the meaning set forth in Section
4.1.
"Purchaser
Corporations" has the meaning set forth in Section 3.1.
"Specified
Contracts" means (i) the contracts and other instruments identified on
Schedule 2.3 and (ii) each other contract or other instrument relating
exclusively to any one or more of the Specified Assets that is executed or
entered into on behalf of Seller on or after the date of this Agreement and
prior to the Closing in the ordinary course of business or with the approval
of
Purchaser.
