Exhibit 2.1
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of this
21st day of July, 2000 by and among (i) XxxxXxxxxxx.xxx, Incorporated, a Nevada
corporation and its assignees ("HOMESEEKERS"), and (ii) all of the members of
IRIS - Immediate Results Through Intuitive Systems, LLC, a California limited
liability company ("IRIS"), consisting of Xxxx Xxxxxxxxx ("XXXXXXXXX"), Xxxxx
Xxxxx ("XXXXX"), Xxxxxxxx X. Xxxxxxxxx ("XXXXXXXXX") and Xxx Xxxxxxx
("XXXXXXX"). (Robertson, Ureno, Xxxxxxxxx and Xxxxxxx, are individually referred
to herein as a "MEMBER" and collectively as the "MEMBERS").
R E C I T A L S
WHEREAS, the Board of Directors of HomeSeekers and the Members of IRIS
have determined that it is in the best interests of their respective
shareholders and Members for HomeSeekers to acquire all of the issued and
outstanding membership interests in IRIS (the "IRIS INTERESTS") from the
Members.
A G R E E M E N T
NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein contained and subject to the
conditions and other terms herein contained, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE OF IRIS INTERESTS
Subject to the terms and conditions of this Agreement, on the Closing
Date (as defined in Article III), HomeSeekers shall purchase from each Member,
and each Member shall sell, convey, assign, transfer and deliver to HomeSeekers,
such Member's interest in the IRIS Interest, so that HomeSeekers shall acquire
100% of the outstanding IRIS Interests.
ARTICLE II
PURCHASE PRICE
2.1 INITIAL CONSIDERATION. On the Closing Date, HomeSeekers shall
deliver to the Members, in the aggregate, five hundred thousand (500,000) shares
of validly issued, fully paid and nonassessable common stock, $.001 par value,
of HomeSeekers ("HOMESEEKERS SHARES"), to be divided among the Members in
accordance with written instructions signed by each of the Members. Within one
(1) business day following the Closing Date, HomeSeekers shall also deliver to
the Members, in the aggregate, Twenty-Five Thousand Dollars ($25,000) in
immediately available funds, in accordance with written instructions signed by
each of the Members.
2.2 CONDITIONAL PROMISSORY NOTE. At the Closing (as defined in Article
III), HomeSeekers shall execute and deliver the Conditional Promissory Note in
substantially the form set forth in EXHIBIT 2.2 of this Agreement.
ARTICLE III
CLOSING
Subject to the terms and conditions of this Agreement, the closing of
this Agreement (the "CLOSING") shall take place at the offices of Xxxxx &
Xxxxxx, LLP, at 000 Xxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxx Xxxx, Xxxxxxxxxx 00000,
on July 21, 2000, or at such time and place as the parties may agree. The date
on which the Closing occurs shall be referred to as the "Closing Date."
ARTICLE IV
HOMESEEKERS REPRESENTATIONS AND WARRANTIES
As a material inducement to the Members to enter into this Agreement
and to consummate the transactions contemplated hereby, HomeSeekers represents
and warrants to the Members that the statements contained in this Article IV are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Article
IV).
4.1 AUTHORITY; ENFORCEABILITY. HomeSeekers is a corporation duly
organized, existing, and in good standing under the laws of Nevada.
4.2 CORPORATE POWERS AND AUTHORITY. HomeSeekers has the requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of this transaction by HomeSeekers has been duly authorized by all
necessary corporate action (no approval by the shareholders of HomeSeekers being
required by applicable law or its certificate or articles of incorporation and
Bylaws).
4.3 ENFORCEABILITY. This Agreement constitutes the valid and legally
binding obligation of HomeSeekers enforceable in accordance with its terms,
except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
4.4 CAPITALIZATION. As of the date hereof, the authorized capital stock
of HomeSeekers consists of Fifty Million (50,000,000) shares of HomeSeekers
Common Stock. As of July 19, 2000, Twenty One Million Seven Hundred Seventy Two
Thousand Two Hundred Twenty Two (21,772,222) shares of HomeSeekers Common Stock
were validly issued and outstanding. As of July 19, 2000, HomeSeekers had
granted Seven Million Five Hundred Sixty Four Thousand Four Hundred Thirteen
(7,564,413) options under HomeSeekers' 1996 Amended and Restated Stock Option
Plan. As of July 19, 2000, there were outstanding warrants to purchase a total
of Two Million Two Hundred Thousand Five Hundred Forty Four (2,200,544) shares
of HomeSeekers Common Stock. All of the issued and outstanding shares of the
Common Stock of HomeSeekers have been duly authorized, are validly issued, are
fully paid and nonassessable, none of those shares were issued in violation of
the preemptive rights of any person, and to the knowledge of HomeSeekers'
current management, substantially all of the issued and outstanding shares of
the Common Stock of HomeSeekers were offered, issued, sold
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and delivered in compliance with all applicable state or federal laws concerning
the issuance of securities.
4.5 CONSENTS AND APPROVALS. Except for such reports and information
under the Exchange Act and the rules and regulations promulgated by the SEC
thereunder as may be required in connection with the Agreement and the
transactions contemplated hereby, a Form D, and filings made pursuant to
applicable state securities laws and the Bylaws of the National Association of
Securities Dealers, Inc. ("NASD"), no consent, approval, or authorization of, or
declaration, filing, or registration with, any United States federal or state
governmental or regulatory authority is required to be made or obtained by
HomeSeekers in connection with the execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement (other than disclosure obligations which may arise under federal
securities laws).
4.6 NO CONFLICT. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(a) violate any law to which HomeSeekers is subject that would materially
adversely affect the rights of the Members under this Agreement, (b) violate any
provision of the Amended and Restated Articles of Incorporation or its Amended
and Restated Bylaws, or (c) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
HomeSeekers is a party or by which HomeSeekers is bound or to which any of
HomeSeekers' assets is subject.
4.7 LITIGATION. No action, suit, or proceeding is pending or, to
HomeSeekers' knowledge, threatened against HomeSeekers before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction which would (a) prevent consummation of any of the transactions
contemplated by this Agreement, or (b) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation.
4.8 HOMESEEKERS STOCK ISSUED. The shares of HomeSeekers Common Stock to
be issued in connection with this transaction including, without limitation, the
HomeSeekers Common Stock to be issued pursuant to the Conditional Promissory
Note provided for in SECTION 2.2 hereof will, when issued and delivered to the
Members, be duly and validly authorized and issued, fully paid, nonassessable
and free of preemptive rights or other restrictions other than those imposed
pursuant to securities laws and those expressly provided for in this Agreement.
4.9 NASDAQ SMALL CAP MARKET LISTING. Eighteen Million One Hundred
Twenty Six Thousand One Hundred Ninety Three (18,126,193) shares of HomeSeekers
Common Stock is duly listed on the Nasdaq Small Cap Market, and no inquiry or
proceeding has been initiated or, to HomeSeekers' knowledge, threatened for the
purpose of causing such listing to be terminated or restricted.
4.10 SEC DOCUMENTS. HomeSeekers has filed all required forms, reports
and documents with the Securities and Exchange Commission (the "SEC") since
September 1, 1999, each of which has complied in all material respects with all
applicable requirements of the
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Securities Act of 1933, as amended (the "SECURITIES Act"), and the Exchange Act
(and the rules and regulations promulgated thereunder respectively, each as in
effect on the dates such forms, reports and documents were filed ("HOMESEEKERS'
SEC REPORTS").
4.11 NO COMMISSIONS. HomeSeekers has not incurred any obligation for
any finder's or broker's or agent's fees or commissions or similar compensation
in connection with the transactions contemplated hereby, other than such
compensation as may be due and payable to their officers, employees or
contracted consultants.
4.12 DISCLOSURE. No representation or warranty made by HomeSeekers in
this Agreement, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements or facts contained herein or therein not misleading in light of the
circumstances under which they were furnished.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF IRIS AND MEMBERS
As of the date hereof, except as disclosed in Disclosure Schedule
referring specifically to the relevant subsections of this Article V (the "IRIS
DISCLOSURE SCHEDULE"), the Members hereby severally represent and warrant to
HomeSeekers that the statements contained in this Article V are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Article V).
5.1 CORPORATE ORGANIZATION. IRIS is a limited liability company duly
organized, validly existing and in good standing under the laws of its state of
organization and has all requisite corporate power and authority and all
necessary governmental authorizations to own, lease and operate its properties
and to conduct its business as it is now being conducted. IRIS is duly qualified
or licensed to do business and is in good standing as a foreign limited
liability company in each state or other jurisdiction in which the nature of its
business or operations or ownership of its property requires such qualification
or licensing, except where the failure to be so qualified or licensed would not,
individually or in the aggregate, materially and adversely affect the condition
(financial or other), business, properties, prospects (as currently
contemplated), net worth or results of operations of IRIS taken as a whole
(collectively, "IRIS'S BUSINESS"). IRIS has no direct or indirect interest in or
loans to any partnership, corporation, joint venture, business association or
other entity which in the aggregate exceed $10,000. The Members have delivered
to HomeSeekers complete and correct copies of the Articles of Organization and
Operating Agreement (and other organizational or charter documents) of IRIS, as
amended to the date hereof. IRIS has no "Subsidiary," as that term is defined in
Rule 1.01 in Regulation S-X promulgated under the Securities Act of 1933, as
amended (the "SECURITIES ACT").
5.2 CAPITAL STRUCTURE. Each Member is the owner of the IRIS Interests
set forth in Schedule 5.2. IRIS has provided HomeSeekers with a complete and
accurate list of (a) all issuances of membership interests in IRIS, and (b) the
names and addresses of all holders of equity in IRIS. IRIS is not under any
obligation to register under the Securities Act any of its presently outstanding
securities or any securities that may subsequently be issued. There are no
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agreements or understandings to which IRIS is a party or, to the Knowledge (as
defined below) of the Members, any other agreements or understandings, with
respect to the transfer or voting of equity in IRIS. There are no outstanding
options to purchase any membership interests or other equity in IRIS. For
purposes of this Agreement "Knowledge" means the actual knowledge of the Members
after review of IRIS files and reasonable inquiry of such persons who reasonably
could be expected to possess actual knowledge of the truth and accuracy of the
representations and warranties stated herein that are qualified by the phrase to
"Seller's Knowledge" or any similar phrase.
5.3 NO OTHER AGREEMENTS TO SELL ASSETS, MERGE, ETC. Neither IRIS nor
any of the Members has any legal obligation, absolute or contingent, to any
Person (as defined below) or firm to sell assets other than in the ordinary
course of business or to effect any merger, consolidation or reorganization of
IRIS or to enter into any agreement with respect thereto. For purposes of this
Agreement, the term "Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, estate, trust,
unincorporated association, joint venture, Governmental Authority (as defined in
SECTION 5.5) or other entity, of whatever nature.
5.4 AUTHORIZATION; EXECUTION AND DELIVERY. Each Member has all
requisite power and authority (a) to execute and deliver this Agreement, (b) to
perform his or her obligations under this Agreement, and (c) to consummate the
transactions contemplated hereby and thereby. This Agreement constitutes the
legal, valid and binding obligation of each Member, enforceable in accordance
with its terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditor's rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
5.5 GOVERNMENTAL APPROVALS AND FILINGS. Except for filings made
pursuant to applicable state and federal securities laws contemplated by SECTION
4.5, no approval, authorization, consent, license, clearance or order of,
declaration or notification to, or filing, registration or compliance with, any
Governmental Authority is required on the part of IRIS or its Members in order
(a) to permit the Members to perform their obligations under this Agreement, or
(b) to prevent the termination of any right, privilege, license or agreement of
IRIS. For purposes of this Agreement, the term "Governmental Authority" means
the federal government, any state, regional, local or other political
subdivision thereof, and any entity or official exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to such government.
5.6 NO CONFLICT. Neither the execution, delivery and performance of
this Agreement by the Members, nor the consummation by the Members of the
transactions contemplated hereby will (a) conflict with, or result in a breach
of, any of the terms, conditions or provisions of IRIS's Articles of
Organization or Operating Agreement (or other organizational or charter
documents), (b) conflict with, result in a material breach or material violation
of, give rise to a termination right or a material default under, result in the
acceleration of performance under (whether or not after the giving of notice or
lapse of time or both), any mortgage, lien, lease, agreement, note, bond,
indenture, guarantee or instrument or any license or franchise granted by or to
a third party, in each case, that is material to IRIS's Business, (c) to the
Knowledge of the Members
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conflict with, or result in a material violation of, any statute, regulation,
law, ordinance, writ, injunction, order, judgment or decree to which IRIS or any
of its assets may be subject, (d) give rise to a declaration or imposition of
any lien, charge, security interest or encumbrance of any nature whatsoever upon
any of the assets of IRIS or the IRIS Interests, or (e) to the Knowledge of the
Members require the consent of any third party.
5.7 FINANCIAL STATEMENTS; ABSENCE OF UNDISCLOSED LIABILITIES.
(a) IRIS has furnished HomeSeekers with IRIS's balance sheets
as of December 31, 1998, and 1999 and the first quarter of 2000, and
the related statements of operations, and changes in members' equity
for each of the years 1998 and 1999 and the first quarter of 2000 ended
March 31, 2000, together with the notes thereto and the related reports
of its independent public accountants, and the unaudited balance sheet
and related statements of operations, and changes in members' equity
for the period ended June 30, 2000 (collectively, the "IRIS FINANCIAL
STATEMENTS"). The IRIS Financial Statements, including the notes
thereto, (i) are in accordance with the respective books of IRIS, (ii)
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, and
(iii) present fairly the financial position of IRIS as of the
respective dates thereof and the results of operations of IRIS for the
respective periods indicated therein.
(b) Except as disclosed in this Agreement or in the Disclosure
Schedule to this Agreement, IRIS has no liabilities of any nature,
whether accrued, absolute, contingent or otherwise, and whether due or
to become due, which were not disclosed or provided for in IRIS
Financial Statements or the notes thereto other than obligations not
required to be disclosed or provided for under generally accepted
accounting principles and liabilities incurred since June 30, 2000,
which are not individually or in the aggregate, material to IRIS's
Business. There are no loss contingencies (as such term is used in
Statement of Financial Accounting Standards No. 5) which were not
adequately provided for in IRIS Financial Statements or reflected in
the notes thereto.
(c) The accounts receivable of IRIS shown on the IRIS
Financial Statements at June 30, 2000 are collectible in the ordinary
and usual course of business, and are not subject to any defense or
right of set-off that may be asserted or any claim of set-off that may
be made, other than as reflected in the allowance for doubtful accounts
shown on the balance sheet contained in the IRIS Financial Statements
at June 30, 2000. The reserve for doubtful accounts is adequate, and
the values at which accounts receivable are carried on such June 30,
2000 balance sheet reflect the policies of IRIS consistent with IRIS's
past practice and are in accordance with generally accepted accounting
principles applied on a consistent basis.
5.8 ABSENCE OF CHANGES. Since June 30, 2000 (a) there has been no
material adverse change in IRIS's Business or any development known to IRIS that
is reasonably expected to cause a material adverse change in IRIS's Business;
(b) there has been no damage, destruction or loss (whether or not covered by
insurance) materially and adversely affecting any assets material to IRIS's
Business; (c) there has been no change by IRIS in accounting principles or
methods except insofar as may be required by a change in generally accepted
accounting principles; (d)
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there has been no revaluation by IRIS of any of its assets, including, without
limitation, writing down the value of inventory or writing off notes or accounts
receivable; and (e) IRIS has conducted its business only in the ordinary course
consistent with past practice; and no event described in SECTION 6.2 or SECTION
6.7 has occurred. For purposes of this Agreement, the phrase "Materially
Adverse", have a "Material Adverse Change (or Effect)" or words to that effect
means a change (or effect), in the condition (financial or otherwise),
properties, assets, liabilities, rights, obligations, operations, business or
prospects of IRIS which change (or effect) individually or in the aggregate, is
materially adverse to such condition, properties, assets, liabilities, rights,
obligations, operations, business or prospects.
5.9 CONTRACTS AND COMMITMENTS. The IRIS Disclosure Schedule sets forth
a list of each Material Contract (as defined below). A true, correct, and
complete copy of each Material Contract, including all amendments thereto made
through the date of this Agreement, has been furnished to HomeSeekers. To the
Knowledge of the Members, (a) IRIS has not violated any of the material terms or
conditions of any Material Contract, and to the Knowledge of the Members, all of
the covenants to be performed by any other party thereto have been fully
performed, and (b) to the Knowledge of the Members, there are no material claims
for breach or indemnification or notice of default or termination under any
Material Contract. To the Knowledge of the Members: (i) no event has occurred
which constitutes, or after notice or the passage of time, or both, would
constitute a material default by IRIS under any Material Contract, and (ii) no
such event has occurred which constitutes or would constitute a default by any
other party. To the Knowledge of the Members, IRIS is not subject to any
liability or payment resulting from renegotiation of amounts paid under any
Material Contract.
As used in this Agreement, the term "Material Contracts" shall include,
without limitation, formal or informal, written or oral: (a) loan agreements,
indentures, mortgages, pledges, hypothecations, deeds of trust, conditional sale
or title retention agreements, security agreements, equipment financing
obligations or guaranties, or other sources of contingent liability in respect
of any indebtedness or obligations to any other Person, or letters of intent or
commitment letters with respect to the same in excess of $5,000; (b) contracts
obligating IRIS to provide products or services for a period of one year or
more; (c) real property leases; (d) distribution, sales agency or franchise or
similar agreements, or agreements providing for an independent contractor's
services; (e) employment agreements, management service agreements, consulting
agreements, confidentiality agreements, non-competition agreements, employee
handbooks, policy statements and any other agreements relating to any employee,
officer or director of IRIS; (f) licenses, assignments or transfers of
trademarks, trade names, service marks, patents, copyrights, trade secrets or
know how, or other agreements regarding proprietary rights or intellectual
property; (g) any contract relating to pending capital expenditures by IRIS in
excess of $10,000; (h) any non-competition agreements restricting IRIS in any
manner; and (i) any contracts obligating IRIS to make payments in excess of
$20,000 over the remaining terms of such contract.
5.10 LEGAL PROCEEDINGS. To the Knowledge of the Members, IRIS is not in
violation of, and has not received any notice of any violation of (a) any
applicable statute, law, regulation, ordinance, writ, injunction, order,
judgment or decree, the effect of which violation could, individually or in the
aggregate, be Materially Adverse to IRIS's Business, or (b) any provision of the
Articles of Organization or Operating Agreement (or other organizational or
charter
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document) of IRIS. To the Knowledge of the Members, there is no order,
writ, injunction, judgment or decree outstanding, and no legal, administrative,
arbitration or other proceeding, action, suit or governmental investigation or
inquiry against or relating to IRIS or its assets or business ("IRIS LEGAL
PROCEEDINGS") pending or threatened, and to the Knowledge of the Members, there
are no claims (including unasserted claims as to which there has been a
manifestation by a potential claimant of an awareness of such claim or it is
considered probable that a claim will be asserted and there is a reasonable
possibility that the outcome will be unfavorable, all as such terms are used in
Statement of Financial Accounting Standards No. 5), against or relating to IRIS
or its assets or business, which pending or threatened IRIS Legal Proceedings or
claims would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on IRIS's Business. The IRIS Disclosure Schedule sets
forth with respect to each IRIS Legal Proceeding, to the extent that the
aggregate remedies or damages claimed for each such complaint are unspecified,
involve specific performance or injunctive relief or exceed $10,000, the forum,
the parties thereto, a brief description of the subject matter thereof and the
amount of damages claimed. There is no IRIS Legal Proceeding which in any manner
challenges or seeks to prevent, enjoin, alter or delay any of the transactions
contemplated hereby.
5.11 ERISA MATTERS.
(a) The IRIS Disclosure Schedule lists, with respect to IRIS,
(i) all material employee benefit plans (as defined in SECTION 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), (ii) each loan to a non-officer employee in excess of
$5,000, loans to officers and directors and any stock option, stock
purchase, phantom stock, stock appreciation right, supplemental
retirement, severance, sabbatical, medical, dental, vision care,
disability, employee relocation, cafeteria benefit (Code Section 125)
or dependent care (Code Section 129), life insurance or accident
insurance plans, programs or arrangements, (iii) all bonus, pension,
profit sharing, savings, deferred compensation or incentive plans,
programs or arrangements, (iv) other fringe or employee benefit plans,
programs or arrangements that apply to senior management of IRIS and
that do not generally apply to all employees, and (v) any current or
former employment or executive compensation or severance agreements,
written or otherwise, as to which unsatisfied obligations of IRIS of
greater than $5,000 remain for the benefit of, or relating to, any
present or former employee, consultant or director of IRIS (together,
the "IRIS EMPLOYEE PLANS").
(b) IRIS has furnished to HomeSeekers a copy of each of the
IRIS Employee Plans and related plan documents (including trust
documents, insurance policies or contracts, employee booklets, summary
plan descriptions and other authorizing documents and, to the extent
still in its possession, any material employee communications relating
thereto) and has, with respect to each IRIS Employee Plan which is
subject to ERISA reporting requirements, provided copies of the Form
5500 reports filed for the last three plan years. Any IRIS Employee
Plan intended to be qualified under Section 401(a) of the Code has
either obtained from the Internal Revenue Service a favorable
determination letter as to its qualified status under the Code,
including all amendments to the Code effected by the Tax Reform Act of
1986 and subsequent legislation, or has applied to the Internal Revenue
Service for such a
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determination letter prior to the expiration of the requisite period
under applicable Treasury Regulations or Internal Revenue Service
pronouncements in which to apply for such determination letter and to
make any amendments necessary to obtain a favorable determination.
IRIS has also furnished HomeSeekers with the most recent Internal
Revenue Service determination letter issued with respect to each such
IRIS Employee Plan, and nothing has occurred since the issuance of
each such letter which could reasonably be expected to cause the loss
of the tax-qualified status of any IRIS Employee Plan subject to Code
Section 401(a). Each IRIS Employee Plan has been administered in
accordance with its terms and conditions and in material compliance
with the requirements prescribed by ERISA and the Code, except as
would not have, in the aggregate, a Material Adverse Effect.
(c) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current employee of IRIS to
severance benefits or any other payment (including, without limitation,
unemployment compensation, golden parachute or bonus), except as
expressly provided in this Agreement, or (ii) accelerate the time of
payment or vesting of any such benefits, or increase the amount of
compensation due any such employee or service provider.
(d) There has been no amendment to, written interpretation or
announcement (whether or not written) by IRIS relating to, or change in
participation or coverage under, any IRIS Employee Plan which would
materially increase the expense of maintaining such Plan above the
level of expense incurred with respect to that Plan for the most recent
fiscal year included in IRIS's financial statements.
5.12 TAXES.
(a) For purposes of this SECTION 5.12 and other provisions of
this Agreement relating to Taxes, the following definitions shall
apply:
(i) The term "Taxes" shall mean all taxes, however
denominated, including any interest, penalties or other
additions to tax that may become payable in respect thereof,
(A) imposed by any federal, territorial, state, local or
foreign government or any agency or political subdivision of
any such government, which taxes shall include, without
limiting the generality of the foregoing, all income or
profits taxes (including but not limited to, federal income
taxes and state income taxes), payroll and employee
withholding taxes, unemployment insurance, social security
taxes, sales and use taxes, ad valorem taxes, excise taxes,
franchise taxes, gross receipts taxes, business license taxes,
occupation taxes, real and personal property taxes, stamp
taxes, environmental taxes, transfer taxes, workers'
compensation, Pension Benefit Guaranty Corporation premiums
and other governmental charges, and other obligations of the
same or of a similar nature to any of the foregoing, which are
required to be paid, withheld or collected, (B) any liability
for the payment of amounts referred to in (A) as a result of
being a member of any affiliated, consolidated, combined or
unitary group, or (C) any liability for amounts referred to in
(A) or (B) as a result of any obligation to indemnify another
Person.
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(ii) The term "Returns" shall mean all reports,
estimates, declarations of estimated tax, information
statements and returns relating to, or required to be filed in
connection with, any Taxes, including information returns or
reports with respect to backup withholding and other payments
to third parties.
(iii) The term "Code" shall mean the Internal Revenue
Code of 1986, as amended.
(b) All Returns required to be filed by or on behalf of IRIS
have been duly filed on a timely basis and such Returns are materially
true, complete and correct. All Taxes shown to be payable on such
Returns or on subsequent assessments with respect thereto, have been
paid in full on a timely basis or have been accrued on the Financial
Statements, and no other Taxes are payable by IRIS with respect to
items or periods covered by such Returns (whether or not shown on or
reportable on such Returns) or with respect to any period prior to the
date of this Agreement. IRIS has withheld and paid over all Taxes
required to have been withheld and paid over. There are no liens on any
of the assets of IRIS with respect to Taxes, other than liens for Taxes
not yet due and payable. IRIS has not at any time been a member of any
partnership or joint venture for a period for which the statue of
limitations for any Tax potentially applicable as a result of such
membership has not expired. The amount of IRIS's liability for unpaid
Taxes (whether actual or contingent) for all periods through the date
of the Financial Statements does not, in the aggregate, exceed the
amount of the current liability accruals for Taxes reflected on the
Financial Statements, and the Financial Statements properly accrue in
accordance with GAAP all liabilities for Taxes payable after the date
of the Financial Statements attributable to transactions and events
occurring prior to such date. No liability for Taxes of IRIS has been
incurred (or prior to Closing will be incurred) since the date of the
Financial Statements other than in the ordinary course of business.
(c) IRIS has made available to HomeSeekers true and complete
copies of (i) relevant portions of income tax audit reports, statements
of deficiencies, closing or other agreements received by or on behalf
of IRIS relating to Taxes, and (ii) all federal and state income or
franchise tax Returns and state sales and use tax Returns for or
including IRIS for all periods ending on and after July 31, 1999. The
IRIS Disclosure Schedule sets forth a list of all of the Returns
referred to in clause (ii).
(d) The Returns of IRIS have never been audited by a
government or taxing authority, nor is any such audit in process, or to
the Knowledge of the Members, threatened or pending. No deficiencies
exist or have been asserted in writing, and IRIS has not received
written notice that it has not filed a Return or paid Taxes required to
be filed or paid. IRIS is not a party to any action or proceeding for
assessment or collection of Taxes, nor to the Knowledge of the Members
has such event been asserted or threatened against IRIS, or any of its
assets. No waiver or extension of any statute of limitations is in
effect with respect to Taxes or Returns of IRIS.
(e) IRIS is not (and has never been) a party to any tax
sharing agreement.
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(f) IRIS is not a "consenting corporation" under Section
341(f) of the Code. IRIS has not entered into any compensatory
agreements with respect to the performance of services which payment
thereunder would result in a nondeductible expense to IRIS pursuant to
Section 280G of the Code or an excise tax to the recipient of such
payment pursuant to Section 4999 of the Code. IRIS has not agreed to,
nor is it required to make, any adjustment under Code Section 481(a) by
reason of, a change in accounting method.
5.13 INTELLECTUAL PROPERTY. IRIS has legal right, title and interest in
and to (or the right to use under licenses where specified in SCHEDULE 5.13) all
trademarks, service marks, trade names, copyrights, know-how, patents, trade
secrets, licenses (including licenses for the use of computer software
programs), and other intellectual property used in the conduct of its business
as of the date hereof, including, without limitation, the rights and products
listed on Schedule 5.13 hereto (the "INTELLECTUAL PROPERTY"). To the Knowledge
of the Members, the conduct of the business of IRIS as presently conducted, does
not infringe or misappropriate any rights held or asserted by any Person and no
Person is infringing on any Intellectual Property. To the Knowledge of the
Members, no payments are required for the continued use of the Intellectual
Property. To the Knowledge of the Members, none of the Intellectual Property has
ever been declared invalid or unenforceable, or is the subject of any pending or
threatened action for opposition, cancellation, declaration, infringement, or
invalidity, unenforceability or misappropriation or the like claim, action or
proceeding.
5.14 ENVIRONMENTAL MATTERS. To the Knowledge of the Members, the
operations of IRIS comply in all material respects with all federal, state and
local environmental, health and safety laws, statutes and regulations. To the
Knowledge of the Members, the operations of IRIS are not the subject of any
judicial or administrative proceeding alleging the violation of any federal,
state or local environment, health or safety law, statute or regulation. IRIS
has not filed any notice under federal or state law indicating past or present
treatment, storage or disposal requiring a Part B permit or designation of
"interim status" as defined under 40 C.F.R. Parts 260-270 or any state
equivalent of a hazardous or toxic waste as defined therein or reporting a spill
or release of a hazardous or toxic waste, substance or constituent or other
substance, into the environment except in accordance with applicable law.
As used herein "federal, state and local environmental, health and
safety laws, statutes or regulations" means any and all laws, rules,
regulations, orders, treaties, statutes and codes promulgated by any local,
state, federal or international Governmental Authority or agency which has
jurisdiction over any portion of the current operations of IRIS, which
prohibits, regulates or controls any hazardous material or the transportation,
storage, transfer, recycling, use, treatment, manufacture, investigation,
removal, remediation, release, exposure of others to, sale or distribution of
hazardous materials including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.), the Hazardous Material Transportation Act (49 U.S.C. Section 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.),
the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act, as amended (15 U.S.C. Section 2601 et seq.), and the Occupational Safety
and Health Act (29 U.S.C. Section 651 et seq.), as these laws have been amended
or supplemented to date and any analogous state or local statutes and the
regulations promulgated to date pursuant thereto.
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As used herein, "hazardous or toxic waste, substance or constituent or
other substance" means those substances which are regulated by or form the basis
of liability under any federal, state and local environmental, health and safety
laws, statutes or regulations because they are radioactive, toxic, hazardous or
otherwise a danger to health, reproduction or the environment, including,
without limitation: (a) asbestos, (b) oil and petroleum products, (c)
explosives, (d) radioactive substances, pollutants or wastes, (e) urea
formaldehyde-containing building materials, (f) polychlorinated biphenyls, (g)
radon gas, and (h) ultra-hazardous or toxic substances, pollutants or wastes.
5.15 CERTAIN AGREEMENTS. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (a)
result in any payment (including, without limitation, severance, unemployment
compensation, golden parachute, bonus or otherwise) becoming due to any director
or employee of IRIS, under any Plan or otherwise, (b) increase any benefits
otherwise payable under any Plan, or (c) result in the acceleration of the time
of payment or vesting of any such benefits.
5.16 INTERESTS OF OFFICERS AND DIRECTORS. No officer or director of
IRIS or any "affiliate" or "associate" (as those terms are defined in Rule 405
promulgated under the Securities Act) of any such Person has had, either
directly or indirectly, a material interest in: (a) any Person or entity which
purchases from or sells, licenses or furnishes to IRIS any goods, property,
technology or intellectual or other property rights or services; (b) any
contract or agreement to which IRIS is a party or by which it may be bound or
affected; or (c) any property, real or personal, tangible or intangible, used in
or pertaining to IRIS's Business, including any interest in the IRIS
Intellectual Property Rights.
5.17 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES; CONDITION
OF EQUIPMENT. The IRIS Disclosure Schedule lists all facilities occupied by IRIS
since IRIS's organization, and indicates the nature of IRIS's interest in such
facilities. IRIS has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used in its business, free and
clear of any liens, charges, pledges, security interests or other encumbrances.
The equipment owned or leased by IRIS is, taken as a whole, (i) adequate for the
conduct of the business of IRIS consistent with its past practice, (ii) suitable
for the uses to which it is currently employed, and (iii) in good operating
condition.
5.18 REGULATORY MATTERS; GOVERNMENTAL LICENSES; COMPLIANCE WITH LAWS.
IRIS has obtained all material consents, approvals, registrations,
certifications, authorizations, permits and licenses of, and has made all
filings with, or notifications to, all Governmental Authorities pursuant to
applicable requirements of all federal, state or local and foreign, laws,
ordinances, governmental rules or regulations applicable to IRIS and its
business, except those which would not have a Material Adverse Effect on IRIS.
IRIS is in material compliance with all federal, state or local and foreign,
laws, ordinances, governmental rules or regulations applicable to its business
and has no reason to believe that any of its consents, approvals,
authorizations, registrations, certifications, permits, filings or notifications
that it has received or made to operate its business are invalid or have been or
are being suspended, canceled, revoked or questioned. To the Knowledge of the
Members, there is no investigation or inquiry to which IRIS is a party or
pending or threatened relating to the operation of IRIS's business and its
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compliance with applicable federal, state, local or foreign laws, ordinances,
governmental rules or regulations.
5.19 LABOR MATTERS.
(a) IRIS is in compliance in all material respects with all
currently applicable laws and regulations respecting employment,
discrimination in employment, terms and conditions of employment and
wages and hours and occupational safety and health and employment
practices, and is not engaged in any unfair labor practice. IRIS has
complied in all material aspects with all applicable provisions of
COBRA and has no material obligations with respect to any former
employees or qualifying beneficiaries thereunder. IRIS has not received
any notice from any Governmental Authority, and to the Knowledge of the
Members, there has not been asserted before any Governmental Authority,
any claim, action or proceeding to which IRIS is a party or involving
IRIS, and there is neither pending nor, to the Knowledge of the
Members, threatened any investigation or hearing concerning IRIS
arising out of or based upon any such laws, regulations or practices.
The IRIS Disclosure Schedule sets forth the terms pursuant to which all
amounts may be payable (whether currently or in the future) to current
or former officers, directors, or employees of IRIS as a result of or
in connection with the execution of this Agreement.
(b) IRIS is not a party to any labor agreement with respect to
its employees with any labor organization, union, group or association.
IRIS has not experienced any attempt by organized labor or its
representatives to make IRIS conform to demands of organized labor
relating to its employees or to enter into a binding agreement with
organized labor that would cover the employees of IRIS. There is no
labor strike or labor disturbance pending or, to the Knowledge of the
Members, threatened against IRIS nor is any grievance currently being
asserted. IRIS nor has not experienced a work stoppage or other labor
difficulty.
5.20 QUESTIONABLE PAYMENTS. To the Knowledge of the Members, neither
IRIS nor any director, officer, agent or other employee of IRIS, has (a) made
any payments or provided services or other favors in the United States of
America or in any foreign country in order to obtain preferential treatment or
consideration by any Governmental Authority with respect to any aspect of the
business of IRIS, or (b) made any political contributions which would not be
lawful under the laws of the United States or the foreign country in which such
payments were made. To the Knowledge of the Members, neither IRIS nor any
director, officer, agent or other employee of IRIS has been the subject of any
inquiry or investigation by any Governmental Authority in connection with
payments or benefits or other favors to or for the benefit of any governmental
or armed services official, agent, representative or employee with respect to
any aspect of the business of IRIS or with respect to any political
contribution.
5.21 INSURANCE. The IRIS Disclosure Schedule contains a complete and
accurate list of all policies or binders of fire, liability, title, worker's
compensation, product liability and other forms of insurance maintained by IRIS.
To the Knowledge of the Members, IRIS is not in default under any of such
policies or binders, and to the Knowledge of the Members, IRIS has not failed to
give any notice or to present any claim under any such policy or binder in a due
and
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timely fashion. To the Knowledge of the Members, here are no facts known to IRIS
upon which an insurer might be justified in reducing coverage or increasing
premiums on existing policies or binders. There are no outstanding unpaid claims
under any such policies or binders.
5.22 NO COMMISSIONS. Neither IRIS nor the Members have incurred any
obligations to any broker, finder or investment banker for any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement.
5.23 INVESTMENT REPRESENTATIONS. Each Member hereby separately
represents and warrants to HomeSeekers that:
(a) Such Member is knowledgeable regarding HomeSeekers'
business affairs and financial condition, and has acquired sufficient
information about HomeSeekers to reach an informed and knowledgeable
decision to acquire the HomeSeekers Shares. The Member is acquiring the
HomeSeekers Shares for his or her own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"distribution" thereof for purposes of the Securities Act.
(b) The Member understands that the HomeSeekers Shares have
not been registered under the Securities Act or in any state in
reliance upon specific exemptions therefrom, which exemptions depend
upon, among other things, the bona fide nature of the Member's
investment intent as expressed herein.
(c) By reason of the Member's business or financial experience
or the business or financial experience of my professional advisors who
are unaffiliated with HomeSeekers, the Member has the capacity to
protect his or her own interests in the acquisition of the HomeSeekers
Shares.
(d) The Member understands that the HomeSeekers Shares will
constitute "restricted securities" under Rule 144 promulgated under the
Securities Act, and that the Member's ability to resell the HomeSeekers
Shares (subject to the Members rights under Article XI below) will be
limited accordingly.
5.24 DISCLOSURE. No representation or warranty made by the Members in
this Agreement, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements or facts contained herein or therein not misleading in light of the
circumstances under which they were furnished.
ARTICLE VI
COVENANTS OF IRIS
6.1 REGULAR COURSE OF BUSINESS. Except as otherwise consented to in
writing by HomeSeekers, prior to the Closing Date, IRIS shall conduct its
respective business in the ordinary and usual course consistent with past
practice and shall use reasonable efforts to maintain and preserve intact its
business organizations, keep available the services of its officers and
employees and maintain positive relations with licensors, licensees, suppliers,
contractors, distributors, customers and others having business relationships
with IRIS. IRIS shall promptly notify HomeSeekers of any event or occurrence not
in the ordinary course of business and will
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not enter into or amend any agreement or take any action which reasonably could
be expected to have a material adverse effect on IRIS's Business.
6.2 RESTRICTED ACTIVITIES AND TRANSACTIONS. Except as provided herein
or as otherwise consented to in writing by HomeSeekers, prior to the Closing
Date, the Members will not cause or allow IRIS to take any of the following
actions:
(a) propose, adopt or permit an amendment of IRIS's Articles
of Organization or Operating Agreement;
(b) issue, sell, encumber or deliver, or agree to issue, sell,
encumber or deliver, any membership interests or any securities
convertible into any such membership interests or convertible into
securities in turn so convertible, or any options, warrants, or other
rights calling for the issuance, sale or delivery of any such
membership interests or convertible securities or authorize or propose
any change in its equity capitalization;
(c) split, combine or reclassify any of its membership
interests or issue or authorize or propose the issuance or
authorization of any other securities in respect of, in lieu of or in
substitution for membership interests or repurchase, redeem or
otherwise acquire any shares of its membership interests,
(d) mortgage or pledge any of its assets, tangible or
intangible, except in the ordinary course of business,
(e) except in the ordinary course of business, (i) borrow, or
agree to borrow, any funds or voluntarily incur, assume or become
subject to, whether directly or by way of guarantee or otherwise, any
obligation or liability (absolute or contingent), (ii) cancel or agree
to cancel any debts or claims, (iii) lease, sell or transfer, agree to
lease, sell or transfer, or grant or agree to grant any preferential
rights to lease or acquire, any of its assets, property or rights
(except for (A) dispositions of obsolete or worthless assets, (B) sales
of immaterial assets not in excess of $10,000 in the aggregate and (C)
leases of equipment in the ordinary course of business pursuant to
commitments as set forth in the IRIS Disclosure Schedule), or (iv) make
or permit any material amendments or termination of any material
contract, agreement, license or other right to which it is a party;
(f) except in the ordinary course of business (i) grant any
increase in compensation to any employee or director, (ii) amend in any
respect the terms of any Plan or adopt any new Plan or similar
arrangements or agreements (except in each case as specifically
provided in this Agreement or as required by law), or (iii) enter into
or amend any employment, severance or similar arrangement;
(g) accelerate, amend or change the period of exercisability
of any rights to purchase securities of IRIS or change the vesting
period of any restricted stock of IRIS or authorize cash payments in
exchange for any outstanding IRIS Options;
(h) except in the ordinary course of business, hire any
management personnel or terminate any employee of IRIS, except in the
ordinary course of business involving a
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Person with an annual salary of less than $10,000 and only (in the
case of a new hire) pursuant to an at-will arrangement without any
severance benefits;
(i) acquire control or ownership of any other corporation,
association, joint venture, partnership, business trust or other
business entity, or acquire control or ownership of all or a
substantial portion of the assets of any of the foregoing, or
incorporate or form, or cause to be incorporated or formed, any
corporation, association, joint venture, partnership, business trust or
other business entity, or merge, consolidate or otherwise combine with
any other corporation (except as provided for in this Agreement), or,
except in the ordinary course of business, otherwise acquire or agree
to acquire any assets which are material, individually or in the
aggregate, to the IRIS Business;
(j) except in the ordinary course of business, pay, discharge
or satisfy any claims, liabilities or obligations (whether absolute,
accrued, contingent or otherwise), other than the payment, discharge or
satisfaction of in the ordinary course of business consistent with past
practice of liabilities reflected or reserved against in the IRIS
Financial Statements;
(k) except in the ordinary course of business, enter into or
agree to enter into any transaction material to IRIS's Business;
(l) except in the ordinary course of business, transfer or
license to any Person or entity, or otherwise extend, amend or modify,
any rights to the IRIS Intellectual Property Rights;
(m) except in the ordinary course of business, enter into or
amend any agreements pursuant to which any other party is granted most
favored customer status or exclusive marketing, distribution or other
similar rights with respect to any products of IRIS;
(n) except in the ordinary course of business, change the
accounting methods or practices followed by IRIS, including any change
in any assumption underlying, or method of calculating, any bad debt,
contingency or other reserve, except as may be required by changes in
generally accepted accounting principles, make or change any material
Tax election, adopt or change any Tax accounting method; or
(o) allow or permit to be done any act by which any of its
insurance policies may be suspended, impaired or canceled.
6.3 TAXES; CONSENT. The Members shall cause IRIS to prepare and timely
file all Returns and amendments thereto required to be filed by it on or before
the Closing Date. IRIS shall pay and discharge all Taxes, assessments and
governmental charges upon or against it or any of its properties or assets, and
all liabilities at any time existing, before the same shall become delinquent
and before penalties accrue thereon, except to the extent and as long as the
same are being contested in good faith and by appropriate proceedings pursued
diligently and in such a manner as not to cause any material adverse effect upon
the condition (financial or otherwise) or operations of IRIS. The Members shall
cause IRIS to, as of the Closing Date, terminate all tax allocation agreements
or tax sharing agreements with respect to IRIS and shall
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ensure that any such agreements are of no further force or effect as to IRIS on
and after the Closing Date.
6.4 CONSENTS, APPROVALS AND FILINGS OF IRIS. The Members will cause
IRIS to comply as promptly as practicable with the governmental requirements
specified in SECTION 5.5 hereof and to obtain on or before the Closing all
necessary approvals, authorizations, consents, licenses, clearances or orders of
Governmental Authorities referred to in such section or of other Persons
referred to in SECTION 5.6 or the IRIS Disclosure Schedule.
6.5 CONSENTS, APPROVALS AND FILINGS OF HOMESEEKERS. HomeSeekers will
comply as promptly as practicable with the governmental requirements specified
in SECTION 4.5 hereof, and will obtain on or before the Closing, all necessary
approvals, authorizations, consents, licenses, clearances or orders of
Governmental Authorities referred to in such section.
6.6 RELEASE FROM GUARANTEES. Following the Closing, HomeSeekers shall
use commercially reasonable efforts to have the Members released from any and
all guarantees involving any IRIS indebtedness, or obligations, including
without limitation any guarantees involving any leases and/or bank indebtedness
that the Members personally guaranteed, with all such guarantees being assumed
by HomeSeekers. HomeSeekers agrees to indemnify each Member against any and all
claims under such guarantees, which arise as a result of HomeSeekers' failure or
inability to cause such guarantees to be released.
6.7 DISTRIBUTIONS; REPURCHASES. Except as otherwise consented to in
writing by HomeSeekers prior to the Closing Date, IRIS will not declare or pay
any distribution from capital accounts in cash, stock or property, and will not
redeem, repurchase or otherwise acquire any membership interests or rights to
acquire its membership interests.
ARTICLE VII
OTHER AGREEMENTS AND COVENANTS OF THE PARTIES
7.1 FURTHER ASSURANCES. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby and to
satisfy the conditions set forth in Articles VIII and IX. The Members shall
cause IRIS to comply with all of the covenants of IRIS under this Agreement.
7.2 TERMINATION OF BONUS ARRANGEMENTS. Except for such plans or
arrangements as are disclosed in the Disclosure Schedule, existing bonus plans
or incentive compensation arrangements between IRIS and its employees shall have
been canceled prior to the Closing.
7.3 INDEBTEDNESS. The Members covenant and agree that the aggregate
book amount of the total liabilities of IRIS, excluding real property leases and
operating leases (the "IRIS INDEBTEDNESS"), shall not exceed $565,000 on the
Closing Date. If the IRIS Indebtedness on the Closing Date exceeds $565,000,
then HomeSeekers shall be entitled to such excess as Indemnifiable Damages.
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ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF HOMESEEKERS
The obligations of HomeSeekers to effect the transactions contemplated
hereby shall be subject to the fulfillment at or prior to the Closing Date of
the following conditions, any or all of which may be waived in whole or in part
by HomeSeekers:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of the Members contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing Date. The Members and IRIS shall have delivered to HomeSeekers a
certificate, dated as of the Closing Date, duly signed, certifying that such
representations and warranties are true and correct and that all such
obligations have been performed and complied with.
8.2 CORPORATE CERTIFICATE. The Members shall have delivered to
HomeSeekers (i) copies of the Charter Documents as in effect immediately prior
to the Closing Date, (ii) written resignations of IRIS's managers and (iii) a
certificate of good standing issued by the Secretary of State of the State of
IRIS's organization as of a date not more than ten (10) days prior to the
Closing Date, certified in the case of subsections (i) and (ii) as of the
Closing Date by the Secretary of IRIS as being true, correct and complete.
8.3 CONSENTS. IRIS and the Members shall have received consents to the
transactions contemplated hereby and waivers of rights to terminate or modify
any material rights or obligations of IRIS and the Members from any Person from
whom such consent or waiver is required under any contract to which the Members,
IRIS or the assets are bound.
8.4 NO ADVERSE LITIGATION. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit, invalidate or collect damages arising out of
the transactions contemplated hereby, and which, in the judgment of HomeSeekers,
makes it inadvisable to proceed with the transactions contemplated hereby.
8.5 EMPLOYMENT AGREEMENTS. Each of the Members shall have entered into
their respective Employment Agreements with HomeSeekers in the forms attached
hereto as EXHIBIT 8.5.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF IRIS AND THE MEMBERS
The obligations of the Members to effect the transactions contemplated
hereby shall be subject to the fulfillment at or prior to the Closing Date of
the following conditions, any or all of which may be waived in whole or in part
by the Members:
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9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of HomeSeekers contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing Date. HomeSeekers shall have delivered to the Members certificates,
dated as of the Closing Date, and signed by executive officers thereof,
certifying that such representations and warranties are true and correct and
that all such obligations have been performed and complied with.
9.2 CONSIDERATION AND DEPOSITS. At the Closing, HomeSeekers shall have
instructed its transfer agent to issue the HomeSeekers Shares in accordance with
SECTION 2.1 of this Agreement.
9.3 EMPLOYMENT AGREEMENTS. Each of the Members shall have entered into
their respective Employment Agreements in the forms attached hereto as EXHIBIT
8.5.
9.4 CONSENTS. HomeSeekers shall have received consents to the
transactions contemplated hereby and waivers of rights to terminate or modify
any material rights or obligations of HomeSeekers from any Person from whom such
consent or waiver is required.
9.5 NO ADVERSE LITIGATION. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit, invalidate or collect damages arising out of
the transactions contemplated hereby, and which, in the judgment of the Members,
makes it inadvisable to proceed with the transactions contemplated hereby.
9.6 OTHER AGREEMENTS. HomeSeekers shall have entered into a
Registration Rights Agreement in the form attached hereto as EXHIBIT 11.1.
ARTICLE X
INDEMNIFICATION
10.1 AGREEMENT BY THE MEMBERS TO INDEMNIFY. The Members agree to
severally indemnify and hold HomeSeekers and its officers, directors, and agents
thereof (collectively, the "HOMESEEKERS INDEMNIFIED PARTIES") harmless from and
against the aggregate of all expenses, losses, costs, deficiencies, liabilities
and damages, together with all legal fees, disbursements and expenses and
related counsel and paralegal fees and expenses (collectively "INDEMNIFIABLE
DAMAGES") incurred or suffered by the HomeSeekers Indemnified Parties resulting
from or arising out of (a) any breach of a representation or warranty made by
the Members in or pursuant to this Agreement, (b) any breach of the covenants or
agreements made by the Members in this Agreement, (c) any IRIS Indebtedness in
excess of the amount set forth in SECTION 7.3, (d) any claim asserted by Data
Management Services or Xxxxx Business Forms, Inc., with respect to any license
agreement concerning photo technology, or (e) any and all Taxes of IRIS with
respect to any period (or any portion thereof) up to and including the Effective
Date, except for Taxes of IRIS which are reflected as current liabilities for
Taxes that exist as of the Effective Date ("CURRENT TAX LIABILITIES") on the
closing financial statements.
10.2 AGREEMENT OF HOMESEEKERS TO INDEMNIFY. HomeSeekers agrees to
indemnify and hold the Members (collectively, the "MEMBER INDEMNIFIED PARTIES")
harmless from and against any and all Indemnifiable Damages incurred or suffered
by the Member Indemnified
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Parties ("MEMBERS INDEMNIFIABLE DAMAGES") resulting from or arising out of (a)
any breach of a representation or warranty made by HomeSeekers in or pursuant to
this Agreement, (b) any breach of the covenants or agreements made by
HomeSeekers in this Agreement, (c) arising out of the operations of IRIS on or
after the Closing Date, (d) arising out of any Indemnifiable Damages which any
of the Members may incur due to HomeSeekers' failure or inability to be
responsible for any indebtedness or obligations of IRIS which any of the Members
have guaranteed, and (e) any Indemnifiable Damages any of the Members may incur
arising out of any claim arising out of HomeSeekers' breach of SECTION 6.6.
10.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Members and HomeSeekers in this
Agreement or pursuant hereto shall survive the Closing Date for a period of two
(2) years ("SURVIVAL PERIOD"). Notwithstanding any knowledge of facts determined
or determinable by any party by investigation, each party shall have the right
to fully rely on the representations, warranties, covenants and agreements of
the other parties contained in this Agreement or in any other documents or
papers delivered in connection herewith. Each representation, warranty, covenant
and agreement of the parties contained in this Agreement is independent of each
other representation, warranty, covenant and agreement.
10.4 THIRD PERSON CLAIMS. In the event indemnification is sought
pursuant to SECTION 10.1 OR 10.2:
(a) promptly after any party hereto (hereinafter the
"INDEMNIFIED PARTY") has received notice of or has actual knowledge of
any claim by a person not a party to this Agreement ("THIRD PERSON"),
or the commencement of any action or proceeding by a Third Person (such
claim or commencement of such action or proceeding being a "THIRD PARTY
CLAIM") that could give rise to a right of indemnification under this
Agreement, the Indemnified Party shall, as a condition precedent to a
claim with respect thereto being made against any party obligated to
provide indemnification pursuant to SECTION 10.1 OR 10.2 hereof
(hereinafter the "INDEMNIFYING PARTY"), give the Indemnifying Party
written notice of such Third Party Claim describing in reasonable
detail the nature of such Third Party Claim, a copy of all papers
served with respect to that Third Party Claim (if any), an estimate of
the amount of damages attributable to the Third Party Claim to the
extent feasible (which estimate shall not be conclusive of the final
amount of such claim) and the basis for the Indemnified Party's request
for indemnification under this Agreement; provided, however, that the
failure of the Indemnified Party to give timely notice hereunder shall
relieve the Indemnifying Party of its indemnification obligations under
this Agreement. Within twenty (20) days after receipt of such notice
(the "ELECTION PERIOD"), the Indemnifying Party shall notify the
Indemnified Party (a) whether the Indemnifying Party disputes its
potential liability to the Indemnified Party under this SECTION 10 with
respect to that Third Party Claim and (b) if the Indemnifying Party
does not dispute its potential liability to the Indemnified Party with
respect to that Third Party Claim, whether the Indemnifying Party
desires, at the sole cost and expense of the Indemnifying Party, to
defend the Indemnified Party against that Third Party Claim.
(b) if the Indemnifying Party does not dispute its potential
liability to the Indemnified Party and notifies the Indemnified Party
within the Election Period that the
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Indemnifying Party elects to assume the defense of the Third Party
Claim through counsel of its own choosing, then the Indemnifying Party
shall have the right to defend, at its sole cost and expense, that
Third Party Claim by all appropriate proceedings, which proceedings
shall be prosecuted diligently by the Indemnifying Party to a final
conclusion or settled at the discretion of the Indemnifying Party in
accordance with this SECTION 10.4 and the Indemnified Party will
furnish the Indemnifying Party with all information in its possession
with respect to that Third Party Claim and otherwise cooperate with the
Indemnifying Party in the defense of that Third Party Claim; provided,
however, that the Indemnifying Party shall not enter into any
settlement with respect to any Third Party Claim that purports to limit
the activities of, or otherwise restrict in any way, any Indemnified
Party or any affiliate of any Indemnified Party without the prior
consent of that Indemnified Party (which consent shall not be
unreasonably withheld). The Indemnifying Party is hereby authorized, at
the sole cost and expense of the Indemnifying Party, to file, during
the Election Period, any motion, answer or other pleadings that the
Indemnifying Party shall deem necessary or appropriate to protect its
interests or those of the Indemnified Party. The Indemnified Party may
participate in, but not control, any defense or settlement of any Third
Party Claim controlled by the Indemnifying Party pursuant to this
SECTION 10.4 and will bear its own costs and expenses with respect to
that participation; provided, however, that if the named parties to any
such action (including any impleaded parties) include both the
Indemnifying Party and the Indemnified Party, and the Indemnified Party
has been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to
those available to the Indemnifying Party, and that it would be a
non-waivable conflict of interest for counsel for the Indemnifying
Party to also represent the Indemnified Party in such action, then the
Indemnified Party may employ separate counsel at the expense of the
Indemnifying Party, and, on its written notification of that
employment, the Indemnifying Party shall not have the right to assume
or continue the defense of such action on behalf of the Indemnified
Party; provided, however, the Indemnified Party shall not enter into
any settlement with respect to any such Third Party Claim without the
prior written consent of the Indemnifying Parties (which consent shall
not be unreasonably withheld). In the event a waivable conflict of
interest arises, as described in preceding sentence, the Indemnified
Party hereby grants such a waiver and will sign whatever further
documentation the Indemnifying Party may reasonably require to confirm
such a waiver.
(c) if the Indemnifying Party (i) within the Election Period
(A) disputes its potential liability to the Indemnified Party under
this SECTION 10.4, (B) elects not to defend the Indemnified Party
pursuant to SECTION 10.4 or (C) fails to notify the Indemnified Party
that the Indemnifying Party elects to defend the Indemnified Party
pursuant to SECTION 10.4 or (ii) elects to defend the Indemnified Party
pursuant to SECTION 10.4 but fails diligently and promptly to prosecute
or settle the Third Party Claim, then the Indemnified Party shall have
the right to defend the Third Party Claim by all appropriate
proceedings. If it is determined after resolution of all disputes that
the Indemnifying Party failed to fulfill its obligations under SECTION
10.1 OR 10.2 with regard to the defense of such Third Party Claim, the
Indemnifying Party shall be obligated to reimburse the Indemnified
Party for any expenses the Indemnified Party has incurred to defend
such claim.
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10.5 TAX BENEFITS. The parties hereto will make appropriate adjustments
for any Tax benefits, Tax detriments or insurance proceeds in determining the
amount of any indemnification obligation under this SECTION 10, provided that no
Indemnifying Party shall be obligated to seek any payment pursuant to the terms
of any insurance policy. All indemnification payments under this SECTION 10
shall be deemed adjustments to the consideration provided for herein.
10.6 EXCLUSIVE REMEDY. The indemnification provided for in this SECTION
10 shall be the exclusive remedy in any action seeking damages or any other form
of monetary relief brought by any party to this Agreement against another party
with respect to the subject matter described in SECTIONS 10.1 AND 10.2, provided
that nothing herein shall be construed to limit the right of a party, in a
proper case, to seek injunctive relief for a breach of this Agreement.
10.7 LIMITATIONS ON INDEMNIFICATION.
(a) The Survival Period set forth in SECTION 10.3 shall mean
that HomeSeekers must provide written notice of the claim for
indemnification within the Survival Period. HomeSeekers shall not
assert any claim for indemnification hereunder until the aggregate of
all claims against the Members exceeds $25,000 and only for such
amounts in excess of $25,000, and the Members shall not assert any
claim for indemnification hereunder until the aggregate of all claims
against HomeSeekers exceeds $25,000 and only for such amounts in excess
of $25,000. Except as provided for and limited by SECTION 10.7(b),
HomeSeekers agrees that the sole and exclusive remedy of HomeSeekers
for any damage, loss, liability or expense under this Agreement,
including for Indemnifiable Damages, shall be limited to set-off
against the unissued shares described in Section 2.2 and the
accompanying Conditional Promissory Note (during the first year after
the Closing Date) and set-off against Held-Back Shares (after the first
anniversary of the Closing Date), and in no event shall any Member be
individually liable under this Agreement for an aggregate amount which
exceeds the Member's proportionate share of the Held-Back Shares. If it
is determined that any of the HomeSeekers Indemnified Parties is
entitled to indemnification after final adjudication of all such claims
and the exhausting of all appeals (the "ADJUDICATED CLAIM") (in the
event HomeSeekers and the Members dispute the right of the HomeSeekers
Indemnified Parties to be indemnified pursuant to SECTION 10),
indemnification shall be effected solely in accordance with provisions
of SECTION 10.8 of this Agreement.
(b) Subject to the limitations provided in SECTION 10.7(c), in
connection with any Adjudicated Claim involving a breach of SECTION
5.13 of this Agreement, to the extent that the Held-Back Shares, after
satisfaction of all other pending indemnity claims, are insufficient to
effect indemnification with respect to the HomeSeekers Indemnifiable
Damages arising out of a breach of such SECTION 5.13, HomeSeekers shall
be entitled to indemnification in excess of the Held-Back Shares.
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall any Member be individually liable under
this Agreement for an amount in excess of twenty-five percent (25%) of
the lesser of (a) $8,975,000 less the value as of the Closing Date of
the initial consideration received pursuant to SECTION 2.1 or (b) the
value (as determined pursuant to SECTION 1(c) of the Conditional
Promissory Note) of the
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XxxxXxxxxxx Xxxxxx Stock received pursuant to SECTIONS 1(a) AND 1(b)
of the Conditional Promissory Note.
10.8 SET-OFF AND HELD-BACK SHARES. Solely through the first anniversary
of the Closing Date, HomeSeekers may set off any Indemnifiable Damages against a
reasonable number of shares that may be issuable to the Members pursuant to
SECTION 2.2 of this Agreement and Section 1(a) of the Conditional Promissory
Note referenced therein (the "SIX MONTH SHARES") and against a reasonable number
of shares that may be issuable to the Members pursuant to SECTION 2.2 of this
Agreement and Section 1(b) of the Conditional Promissory Note referenced therein
(the "ONE YEAR SHARES") (collectively, the "SET-OFF SHARES"). If there are no
Indemnifiable Damages pending or threatened during the first anniversary of the
Closing Date, (i) HomeSeekers shall not have the right of set-off, (ii) the
maximum number of shares Held-Back Shares (as defined below) shall be ten
percent (10%) of the sum of the Six Months Shares and the One Year Shares, and
(iii) any shares not subject to set-off shall be issued. Any shares in excess of
the Hold-Back Shares shall be delivered to the Members. To provide for the
second year following the Closing Date, HomeSeekers shall set aside as a
hold-back ten percent (10%) of the Six Month Shares and ten percent (10%) of the
One Year Shares (the "HELD-BACK SHARES") and only such Held- Back Shares shall
be subject to set-off. Any shares not subject to set-off shall be issued and
delivered to the Members. Any set-off by HomeSeekers shall be pro-rata as to
each of the Members. Any set-off by HomeSeekers with respect to claim for
Indemnifiable Damages that has not yet been resolved shall be based on a good
faith estimate by HomeSeekers of the extent of the Indemnifiable Damages that it
has incurred and/or will incur, and, once the unresolved claim becomes an
Adjudicated Claim, HomeSeekers shall promptly issue and deliver to the Members
any excess shares against which set-off was exercised. HomeSeekers may set off
against the Held-Back Shares any HomeSeekers' Indemnifiable Damages which are
Adjudicated Claims subject to the following terms and conditions: (a)
HomeSeekers shall give written notice to the Members of any claim for
Indemnifiable Damages or any other loss, damage, cost or expense which
HomeSeekers claims to have sustained by reason thereof and the basis of such
claim; (b) such setoff shall be effected on the later to occur of the expiration
of 30 days from the date of such notice or, if such claim is contested by the
Members, the date the dispute is resolved by the parties in writing; (c) for
purposes of any setoff against the Held-Back Shares, the Held-Back Shares shall
be valued at the closing sale price for a share of HomeSeekers Common Stock on
the date such setoff is effected; (d) such setoff shall be effected against a
pro rata portion of the Held-Back Shares owned by each of the Members; and (e)
all Held-Back Shares shall be deemed to be owned by the Members and such parties
shall be entitled to vote the Held-Back Shares and have any and all rights of
stockholders of HomeSeekers; provided, however, that there shall also be
deposited with HomeSeekers, all shares of HomeSeekers Common Stock or other
assets issued to or paid upon Held-Back Shares as a result of any stock or other
dividend or distribution or stock split with respect to the Held-Back Shares.
HomeSeekers agrees to deliver to the Members no later than two (2) years after
the Closing Date, any Held-Back Shares (and distributions thereon or proceeds
thereof) then held by HomeSeekers unless there then remains unresolved any claim
for HomeSeekers Indemnifiable Damages hereunder for which prior notice has been
given pursuant to the provisions hereof, in which event HomeSeekers shall retain
such number of Held-Back Shares (and such amount of proceeds therefrom or
distributions thereon, as are sufficient to satisfy any such pending unresolved
claims, and shall release the remaining Held-Back Shares (and such remaining
proceeds) as soon as any such pending claims are resolved pursuant to the
provisions of this
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SECTION 10, to the Members in whose name the shares were issued. Any Held-Back
Shares (and proceeds) remaining on deposit after all such pending
indemnification claims shall have all been satisfied or resolved, shall be
promptly returned to the Members in whose name the share were issued.
ARTICLE XI
SECURITIES LAW MATTERS
11.1 REGISTRATION. The Members shall have the registration rights set
forth in the Registration Rights Agreement attached hereto as EXHIBIT 11.1.
11.2 DISPOSITION OF SHARES. The Members agree not to sell, transfer or
otherwise dispose of any HomeSeekers Shares, except pursuant to (a) an exemption
from the registration requirements under the Securities Act, which does not
require the filing by HomeSeekers with the SEC of any registration statement,
offering circular or other document, in which case, each such Seller or
Shareholders shall first supply to HomeSeekers an opinion of counsel (which
counsel and opinions shall be satisfactory to HomeSeekers) that such exemption
is available, or (b) an effective registration statement filed by HomeSeekers
with the SEC under the Securities Act.
11.3 LEGENDS. The certificates representing HomeSeekers Shares shall
bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF BY THE SHAREHOLDER EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND IN COMPLIANCE WITH
APPLICABLE SECURITIES LAWS OF ANY STATE WITH RESPECT THERETO,
OR IN ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER THAT AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE.
HomeSeekers may, unless a registration statement is in effect covering such
shares, place stop transfer orders with its transfer agents with respect to such
certificates in accordance with federal securities laws.
ARTICLE XII
TERMINATION, AMENDMENT AND WAIVER
This Agreement may be terminated at any time prior to the Closing (a)
by mutual written consent of all of the parties hereto at any time prior to the
Closing, (b) by HomeSeekers in the event of a material breach by the Members or
IRIS of any provision of this Agreement, or (c) by the Members in the event of a
material breach by HomeSeekers. Except as provided in Article X, in the event of
termination of this Agreement pursuant to this Article XII, this Agreement shall
forthwith become void; provided, however, that nothing herein shall relieve any
party from liability for the willful breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
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ARTICLE XIII
GENERAL PROVISIONS
13.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered (and shall
be deemed delivered) by certified or registered mail (first class postage
pre-paid), guaranteed overnight delivery, or facsimile transmission if such
transmission is confirmed by delivery by certified or registered mail (first
class postage pre-paid) or guaranteed overnight delivery, to the following
addresses and facsimile numbers (or to such other addresses or facsimile numbers
which such party shall designate in writing to the other party):
IF TO HOMESEEKERS: IF TO IRIS:
HomeSeekers, Incorporated 0000 Xxxxxxx Xxxxx, Xxxxx X
0000 X. XxXxxxxx Xxxx., Xxxxx 00 Xxxxxxx, XX 00000
Xxxx, XX 00000 Telephone: (000) 000-0000
Attn: Xxxx Xxxxxxx, Chairman/CEO Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: with a copy to:
Xxxxxxx & Xxxxxx Xxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxx 000 Xxxxx Xxxx., Xxxxx 0000
Xxxx, XX 00000-0000 Xxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq. Attn: Xxxxx Dallas, Esq.
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
IF TO THE MEMBERS:
Xxxx Xxxxxxxxx
0000 Xxxxxxxx Xx., #000
Xxxxxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Xxxxx Xxxxx
00000 Xxxxxxxxx Xxx.
Xxxxxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxxxx X. Xxxxxxxxx
00000 Xxxxxxxxx Xxx.
Xxxxxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Xxx Xxxxxxx
00 Xxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
13.2 ENTIRE AGREEMENT. This Agreement (including the Disclosure
Schedule and Exhibits attached hereto) and other documents delivered at the
Closing pursuant hereto, contains the entire understanding of the parties in
respect of its subject matter and supersedes all prior agreements and
understandings (oral or written) between or among the parties with respect to
such subject matter. The Disclosure Schedule and Exhibits constitute a part
hereof as though set forth in full above.
13.3 EXPENSES. Except as otherwise provided herein, the parties shall
pay their own fees and expenses, including their own counsel fees, incurred in
connection with this Agreement or any transaction contemplated hereby. The
Members hereby agree to pay any and all sales and/or use taxes which may become
due and owing as a result of the completion of the transactions contemplated
hereby.
13.4 WAIVER. This Agreement may not be modified, amended, supplemented,
canceled, or discharged, except by written instrument executed by all parties.
The failure of any party to enforce any of the provisions of this Agreement
shall not be deemed a waiver of any provisions or of the right of the party
thereafter to enforce any provisions.
13.5 ASSIGNMENT. The rights and obligations of this Agreement shall
bind and inure to the benefit of the parties and their respective successors and
assigns. Except as expressly provided herein, the rights and obligations of this
Agreement may not be assigned by the Members without the prior written consent
of HomeSeekers.
13.6 COUNTERPARTS; FACSIMILE. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument. Executed copies of this
Agreement of this Agreement may be delivered by facsimile, and delivery of
executed facsimile copies to the parties and their counsel shall be deemed to be
a delivery of a duplicate original and sufficient delivery to result in entry to
this Agreement by the transmitting party; provided, however, that within ten
(10) days thereafter a signed duplicate original shall be forwarded to the party
to whom a facsimile copy was forwarded.
13.7 GOVERNING LAW, JURISDICTION AND WAIVER OF VENUE. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Nevada regardless of the fact that any of the parties hereto may be or may
become a resident of a different country, state, or jurisdiction. Any suit,
action, or proceeding arising out of, or with respect to, this Agreement shall
be filed in a court of competent jurisdiction within the County of Washoe, State
of Nevada or in the U.S. District Court for the District of Nevada, Northern
Division. The parties hereby consent to the personal jurisdiction of such courts
within the County of Washoe, State of Nevada and the U.S. District Court for the
District of Nevada, Northern Division. The parties hereby
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waive any objections to venue in such courts with Washoe County, State of Nevada
and the U.S. District Court for the District of Nevada, Northern Division.
13.8 REPRESENTATION BY COUNSEL. Each party hereto represents and agrees
with the other that it has been represented by independent counsel of its own
choosing; it has had the full right and opportunity to consult with its
respective attorneys and other advisors and has availed itself of this right and
opportunity; its authorized officers have carefully read and fully understand
this Agreement in its entirety and have had it fully explained to them by such
party's counsel; it is fully aware of the contents hereof and the meaning,
intent and legal effect thereof; and its authorized officer is competent to
execute this Agreement and has executed this Agreement free from coercion,
duress or undue influence. Each party and its counsel cooperated in the drafting
and preparation of this Agreement and the documents referred to herein.
Accordingly, any rule of law or any legal decision that would require
interpretation of any ambiguities in this Agreement against the party that
drafted it is of no application and is hereby expressly waived. The provisions
of this Agreement shall be interpreted in a reasonable manner to effect the
intentions of the parties and this Agreement.
13.9 ATTORNEYS' FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to receive from the other its reasonable attorneys' fees, costs, and
necessary disbursements in addition to any other relief to which such party may
be entitled.
13.10 SEVERABILITY. In case any provision of this Agreement shall, for
any reason, be held to be invalid, unenforceable, or illegal, such provision
shall be severed from this Agreement, and such invalidity, unenforceable or
illegality shall not affect any other provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
XXXXXXXXXXX.XXX, INCORPORATED,
A NEVADA CORPORATION
By: /s/ Xxxx Xxxxxxx
-------------------------------------------
Name: Xxxx Xxxxxxx
-----------------------------------------
Title: Chairman and Chief Executive Officer
----------------------------------------
IMMEDIATE RESULTS THROUGH
INTUITIVE SYSTEMS, LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY
By: /s/
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
MEMBERS:
/s/ Xxxx Xxxxxxxxx
-----------------------------------------------
XXXX XXXXXXXXX
/s/ Xxxxx Xxxxx
-----------------------------------------------
XXXXX XXXXX
/s/ Xxxxxxxx X. Xxxxxxxxx
-----------------------------------------------
XXXXXXXX X. XXXXXXXXX
/s/ Xxx Xxxxxxx
-----------------------------------------------
XXX XXXXXXX
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