1
EXHIBIT 2.3
ASSET ACQUISITION AGREEMENT
This Asset Acquisition Agreement (the "Agreement") is to be made
effective on October 26, 1999 (the "Effective Date") between Xxxxxxx Xxxxx (the
"Seller") and Xxxxxxx.xxx, Inc., a Delaware corporation ("Xxxxxxx.xxx") with
respect to the following facts:
RECITALS
A. Seller is the registered owner of the Internet domains listed on
Exhibit A hereto (collectively "Domains").
B. Seller is also the beneficial owner, with the same registration
rights of certain trademark/service xxxx registrations and certain common law
trademark/service xxxx rights in the Domains (collectively "Trademarks") (listed
on Exhibit B hereto).
C. Seller owns the content and end user information (including e-mail
addresses) available at the Domains and also the content and end user
information (including e-mail addresses) available at the xxxxx0000.xxx (the
"Content").
D. Seller has agreed to assign the Domains, Trademarks (and associated
goodwill) and Content, on the terms set forth below.
E. Seller is a party to certain authorized dealership relationships
(the "Relationships") listed on Exhibit C hereto.
AGREEMENT
1. Assignment. The Seller hereby assigns, transfers and conveys to
Xxxxxxx.xxx all right, title and interest in the Domains, the InterNic (or other
relevant body) registrations of the same, the Trademarks (including all
associated goodwill), Content and the Relationships. Seller further waives all
claims it has to the Domains, Trademarks, Content and Relationships and agrees
to cease all use of the Domains, Trademarks and Content.
2. Consideration. In consideration of the assignments set forth in
Section 1 hereof and Seller's representations, warranties and covenants made
hereunder, Xxxxxxx.xxx agrees to pay the Seller as follows:
a. six hundred thousand dollars ($600,000) on the date of this
Agreement in cash by wire transfer of immediately available funds to an account
specified in writing by the Seller and
b. up to [*] dollars ($[*]) on the date of the Closing (as
defined below) (subject to Section 3 below) in cash by wire transfer of
immediately available funds to an account specified in writing by the Seller.
3. Relationships.
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
2
a. The consideration set forth in Section 2(b) above shall be
paid to the Seller on the date of the Closing if, on that date, the
Relationships identified on Exhibit C endure to the benefit of Xxxxxxx.xxx. The
parties agree that three days prior to the Closing, Seller shall provide
Xxxxxxx.xxx a list of Relationships Seller in good faith believes will endure to
the benefit of Xxxxxxx.xxx and the existence of which may be publicly disclosed.
Xxxxxxx.xxx shall pay Seller $[*] for each Relationship (with the exception of
[*], for which Seller may receive $[*]) in existence that benefits
Xxxxxxx.xxx on the date of the Closing which Seller and Xxxxxxx.xxx mutually
agree in good faith benefits Xxxxxxx.xxx. To facilitate certain of these
Relationships, Xxxxxxx.xxx, shall, within six months of the Effective Date, open
a retail store in the state of Texas.
b. On August 27, 2000, Xxxxxxx.xxx shall pay to Seller $[*]
for each Relationship identified on Exhibit D which the parties agree in good
faith benefits Xxxxxxx.xxx and which may be publicly disclosed. If on August 27,
2000, the relationship with [*] may be publicly disclosed, Xxxxxxx.xxx shall pay
to Seller an additional $[*].
4. Liabilities. It is understood and agreed that Xxxxxxx.xxx will not
assume any direct or indirect debts, obligations or liabilities of the Seller of
any nature, whether absolute, accrued, contingent, liquidated or otherwise, and
whether due or to become due, asserted or unasserted, known or unknown. Seller
shall indemnify and hold harmless Xxxxxxx.xxx and its transferees, successors
and assigns for any liabilities, contingent or otherwise, associated with the
Domains, Trademarks, Content and Relationships (including but not limited to
claims of trademark infringement) or otherwise associated with the business of
Seller for a period of five years from the date of the Closing; provided,
however, that the amount, if any, to be paid by Seller to Xxxxxxx.xxx under this
Section 4 shall not exceed two hundred thousand dollars ($200,000).
5. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place on __________, 1999 at the offices of
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx and Xxxxxxxxx, LLP, 0000 Xxxxxxx xx
Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000 (or such other time or by
facsimile as the parties may agree).
6. Further Assurances. The Seller shall assist Xxxxxxx.xxx in every
proper way to evidence, record and perfect the assignments described in Section
1 above and to perfect, obtain, maintain, enforce, and defend the rights
assigned. For example, the Seller agrees that he will immediately apply for and
effect re-registration of the Domains and Trademarks in Xxxxxxx.xxx's name
according to InterNic's (or other relevant body's) current policy.
7. Representations; Warranties. The Seller represents and warrants to
Xxxxxxx.xxx that:
a. Seller is the sole owner (other than Xxxxxxx.xxx) of all
rights, title and interest in the Domains, Trademarks, Content and Relationships
to be transferred by Seller.
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
2
3
b. After the Effective Date, the Sellers will discontinue all
further use of the Domains, Trademarks and Content.
c. Seller has full power and authority to enter into this
Agreement, and this Agreement constitutes Seller's valid and legally binding
obligation, enforceable in accordance with its terms.
d. Neither the execution, delivery or performance of this
Agreement nor the consummation of the transactions contemplated thereby,
including without limitation the sale of the Domains, Trademarks, Content and
Relationships to Xxxxxxx.xxx and Xxxxxxx.xxx's exercise of control over the
Domains, Trademarks, Content and Relationships after Closing, will conflict with
any material contract or result in the creation of any lien, claim, security
interest or encumbrance (collectively, "Lien") on the Domains, Trademarks,
Content and Relationships pursuant to, or relieve any third party of any
obligation to the Seller or give any third party the right to terminate or
accelerate any obligation.
e. The Seller acknowledges that Xxxxxxx.xxx will not be
responsible for any income, sales, use, excise or other tax that arises out of
or results from the sale of the Domains, Trademarks, Content and Relationships.
f. The Seller represents that there are currently no pending,
or to the Seller's knowledge, threatened lawsuits, administrative proceedings or
reviews, or formal or informal complaints or investigations by any individual or
other entity against or relating to the Seller or the Domains, Trademarks,
Content and Relationships.
g. The Seller represents that for a period of two (2) years
from the date of this Agreement, Seller will not without prior written consent
from the Chief Executive Officer of Xxxxxxx.xxx which shall not be unreasonably
withheld (except as an employee of Xxxxxxx.xxx or a subsidiary of Xxxxxxx.xxx),
directly or indirectly,
(i) (A) Participate or engage in the design,
development, manufacture, production, marketing, sale or servicing of any
product related to the Domains, Trademarks, Content and Relationships, or (B)
provide any service for any entity whose primary business is to develop or
provide products and/or services similar to the Domains, Trademarks, Content and
Relationships (the "Business") in the international internet business (the
"Geographic Scope of Employee's Business") or
(ii) Permit the name of Seller to be used in
connection with a competitive Business.
8. Representations; Warranties. Xxxxxxx.xxx represents, warrants and
covenants to the Seller that:
a. Xxxxxxx.xxx is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Ashford
Buying Company is a wholly-owned subsidiary of Xxxxxxx.xxx.
3
4
b. Xxxxxxx.xxx has full power and authority to enter into this
Agreement, and this Agreement constitutes a valid and legally binding obligation
of Xxxxxxx.xxx, enforceable in accordance with its terms.
c. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate any
provision of the certificate of incorporation or bylaws of Xxxxxxx.xxx, or any
provision of any material agreement or instrument to which Xxxxxxx.xxx is a
party.
9. Miscellaneous. This Agreement shall be construed pursuant to the
laws of the State of Texas without regard to conflicts of laws provisions
thereof. Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled in Xxxxxx County, Texas, by arbitration
in accordance with the National Rules for the American Arbitration Association.
The decision of the arbitrator shall be final and binding on the parties, and
judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The parties hereby agree that the arbitrator shall
be empowered to enter an equitable decree mandating specific enforcement of the
terms of this Agreement. Seller hereby consents to personal jurisdiction of the
state and federal courts located in the state of Texas for any action or
proceeding arising from or relating to this Agreement or relating to any
arbitration in which the parties are participants.
10. Liquidated Damages. The parties agree that the actual damages that
might be sustained by Xxxxxxx.xxx by reason of the breach by Seller of Section
7g are uncertain and would be difficult to ascertain and that the sum of
$3,750,000 would be reasonable compensation for such breach. Seller hereby
promises to pay, and Xxxxxxx.xxx hereby agrees to accept, such sum as liquidated
damages, and not as a penalty, in the event of such breach. The parties agree
that any damages received by Xxxxxxx.xxx pursuant to this section and pursuant
to Section 10 of the Asset Acquisition Agreement of the same date as this
Agreement among Xxxxxxx.xxx, Power Reserve, Inc. and certain shareholders of
Power Reserve, Inc. shall not, in the aggregate, exceed $3,750,000.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY.]
4
5
IN WITNESS WHEREOF, the parties here to have executed this Agreement
effective as of the date first written above.
SELLER
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxx
XXXXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx
President and Chief Operating Officer
6
EXHIBIT A
LIST OF DOMAINS
Xxxxx0000.xxx
7
EXHIBIT B
LIST OF TRADEMARK/SERVICE XXXX REGISTRATIONS
(COMMON LAW)
Paris1925
Xxxxx0000.xxx
8
EXHIBIT C*
* Pursuant to Item 601(b)(2) of Regulation S-K, this exhibit has been omitted.
Such exhibit will be submitted to the Securities and Exchange Commission
upon request.
9
EXHIBIT D*
* Pursuant to Item 601(b)(2) of Regulation S-K, this exhibit has been omitted.
Such exhibit will be submitted to the Securities and Exchange Commission
upon request.