EXHIBIT 10.8
[EXECUTION COPY]
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DATABASE PURCHASE AGREEMENT
BY AND AMONG
XXXXXXXX.XXX COMMERCE, INC.
NATURAL HEALTH TRENDS CORP.
AND
LIGHTHOUSE MARKETING CORPORATION
DATED AS OF JANUARY 31, 2003
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TABLE OF CONTENTS
ARTICLE 1.............................................................. 1
1.1 Certain Definitions.............................................. 1
1.2 Transfer or the Database......................................... 2
1.3 Liabilities...................................................... 2
1.4 Purchase Price for the Assets; Restrictions on Transfer.......... 3
ARTICLE II............................................................. 3
2.1 The Closing...................................................... 3
2.2 Additional Actions to be Taken on the Closing Date............... 3
ARTICLE III............................................................ 3
3.1 Organization and Qualification................................... 3
3.2 Subsidiaries..................................................... 4
3.3 Validity and Execution of Agreement.............................. 4
3.4. No Conflict...................................................... 4
3.5 Litigation....................................................... 4
3.6 The Database..................................................... 4
3.7 No Material Adverse Change....................................... 4
3.8 Compliance with Laws............................................. 5
3.9 Purchase Entirely for Own Account; No Distribution............... 5
3.10 Receipt of Information........................................... 5
3.11 Restricted Securities............................................ 5
3.12 Legends.......................................................... 5
3.13 Solvency......................................................... 6
3.14 Disclosure....................................................... 6
ARTICLE IV............................................................. 6
4.1 Organization and Qualification................................... 7
4.2 Validity and Execution of Agreement.............................. 7
4.3 No Conflict...................................................... 7
4.4 SEC Reports...................................................... 7
4.5 No Material Adverse Change....................................... 8
4.6 Disclosure....................................................... 8
ARTICLE V.............................................................. 8
5.1 Survival......................................................... 8
5.2 Indemnification.................................................. 8
5.3 Method of Asserting Claims....................................... 9
ARTICLE VI............................................................. 10
6.1 Sales and Transfer Taxes......................................... 10
6.2 Post-Closing Further Assurances.................................. 10
6.3 Notices.......................................................... 11
6.4 Publicity........................................................ 11
6.5 Entire Agreement................................................. 11
6.6 Waivers and Amendments........................................... 12
6.7 Governing Law.................................................... 12
6.8 Binding Effect; No Assignment.................................... 12
6.9 Variations in Pronouns........................................... 12
6.10 Counterparts..................................................... 12
6.11 Exhibits and Schedules........................................... 12
6.12 Effect of Disclosure on Schedules................................ 12
6.13 Headings......................................................... 12
6.14 Severability of Provisions....................................... 12
6.15 Brokers.......................................................... 12
6.16 Confidential Information......................................... 13
DATABASE PURCHASE AGREEMENT
DATABASE PURCHASE AGREEMENT, dated as of January 31, 2003 by and among
XxXxxxxx.xxx Commerce, Inc., a Delaware corporation ("Seller"), Lighthouse
Marketing Corporation, a Delaware corporation (the "Buyer"), and Natural Health
Trends Corp., a Florida corporation ("Buyer Parent").
WITNESSETH:
WHEREAS, the Seller is engaged in a network marketing business offering
home-based business opportunities and is located at 0000 Xxxxxx Xxxx, Xxxxx
000X, Xxxx Xxxxx, Xxxxxxx 00000 (the "Business"); and
WHEREAS, the Seller owns a database consisting of names and addresses of
distributors of Seller's goods and services and their buying patterns (the
"Database"); and
WHEREAS, the Seller wishes to transfer, and the Buyer wishes to purchase,
the Database, in exchange for the Purchase Price (as hereafter defined).
NOW, THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein, the Seller, Buyer and Buyer Parent hereby agree as
follows:
ARTICLE I
DEFINITIONS; PURCHASE OF THE ASSETS;
PURCHASE PRICE; CLOSING
1.1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
have the following meanings unless the context otherwise requires:
"AFFILIATE" means, with respect to any Person, any other Person
controlling, controlled by or under common control with such Person.
"BUSINESS" has the meaning specified in the Recitals.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized or required by law to close in New York
City.
"BUYER" has the meaning specified in the introductory paragraph of this
Agreement.
"CLOSING" has the meaning specified in Section 2.1 (a).
"GOVERNMENTAL OR REGULATORY BODY" means any government or political
subdivision thereof, whether federal, state, county, local or foreign, or any
agency, authority or instrumentality of any such government or political
subdivision.
"INDEMNIFIED PARTY" has the meaning specified in Section 5.2.
"INDEMNIFYING PARTY" has the meaning specified in Section 5.2.
"LIEN" means any lien, pledge, hypothecation, mortgage, security interest,
claim, lease, charge, option, right of first refusal, easement, servitude,
transfer restriction under any stockholder or similar agreement, encumbrance or
any other restriction or limitation whatsoever.
"MATERIAL ADVERSE EFFECT" means any change or changes or effect or effects
that individually or in the aggregate are or is reasonably expected to be
materially adverse to (a) the Assets, operations, income or conditions
(financial or otherwise) of the Business or the transactions contemplated by
this Agreement, (b) the ability of the Seller to perform its obligations under
this Agreement or (c) the business of Buyer following the Closing.
"PERSON" means any individual, corporation, partnership, firm, joint
venture, association, joint-stock company, trust, unincorporated organization,
Governmental or Regulatory Body or other entity.
"PURCHASE PRICE" has the meaning specified in Section 1.5.
"SELLER" has the meaning specified in the introductory paragraph of this
Agreement.
"SHARES" has the meaning specified in Section 1.4.
"SEC" shall mean the U.S. Securities and Exchange Commission.
1.2 TRANSFER OF THE DATABASE. Subject to the terms and conditions set
forth in this Agreement, the Seller agrees that, on the date hereof (the
"Closing Date"), the Seller shall sell, transfer, assign, convey and deliver to
the Buyer, and Buyer shall purchase from the Seller, the Database, free and
clear of all Liens.
1.3 LIABILITIES. Buyer will not assume nor be liable for any liabilities
or obligations of Seller and Buyer is not assuming, and shall not be deemed to
have assumed, any liabilities, obligations for accounts payable or obligations
of Seller of any kind or nature whatsoever. Without limiting the generality of
the foregoing, it is hereby agreed that Buyer is not assuming, and shall not be
deemed to have assumed, any liability and shall not have any obligation for or
with respect to any liability or obligation of Seller (i) under any employee
benefit or profit sharing plan of Seller, (ii) in respect of (x) any sales, use
or excise taxes, (to the extent not otherwise credited against the Purchase
Price or adjusted pursuant to Article 2), income or withholding taxes, or taxes
based on or measured by income or franchise taxes attributable to periods or
events prior to or ending on the Closing Date, federal, state or local payroll
taxes or (y) any legal, accounting, brokerage, finder's fees, or other expenses
of whatsoever kind or nature incurred by Seller or any affiliate, stockholder,
director, employee or officer of Seller as a result of the consummation of the
transactions contemplated by this Agreement, or (iii) arising out of any action,
suit or proceeding based upon an event occurring or a claim arising (x) prior to
the Closing Date or (y) after the Closing Date in the case of claims in respect
of products sold by Seller prior to the Closing Date and attributable to acts
performed or omitted by Seller prior to the Closing Date; or (iv) any liability
or obligation under contracts to which Seller is a party or by which Seller is
bound; or (v) any contingent liabilities of Seller, including, but not limited
to, any liability resulting from any litigation pending, threatened or commenced
before or after the Closing Date (civil or criminal), based on any act or course
of conduct on the part of Seller occurring prior to the Closing Date; or (vi)
any contingent liabilities of Seller in respect of
products sold or otherwise disposed of (including claims for refunds or
replacements) prior to the Closing Date. The provisions of this Section 1.3
shall survive Closing.
1.4 PURCHASE PRICE FOR THE ASSETS. RESTRICTIONS ON TRANSFER. The aggregate
purchase price (collectively, the "Purchase Price") to be paid to Seller for the
Database shall be the issuance by Buyer Parent of thirty six million
(36,000,000) shares of its common stock, par value $.001 per share (the
"Shares").
ARTICLE II
CLOSING
2.1 THE C LOSING. (a) The consummation of the transactions contemplated by
this Agreement (the "Closing") shall be held on the date hereof. Such date is
referred to as the "Closing Date" at the offices of legal counsel to Buyer and
Buyer Parent.
(b) At the Closing, the Seller shall execute and deliver or cause to be
executed and delivered to the Buyer, all documents and instruments necessary to
transfer to the Buyer, all of the right, title and interest of the Seller in and
to the Database.
(c) At the Closing, the Buyer shall deliver the Shares to Seller.
2.2 ADDITIONAL ACTIONS TO BE TAKEN ON THE CLOSING DATE.
(a) LIENS/CONSENTS. The Seller shall have satisfied and discharged all
Liens on the Database and provided the Buyer with evidence of such satisfaction
and discharge as well as all necessary consents to transfer or assign the
Database to Buyer, in form and substance satisfactory to the Buyer.
(b) CONSENTS. The Buyer shall have received written consents to the
transactions contemplated by this Agreement signed by a majority of the
shareholders of Seller and all of the directors of Seller in form and substance
satisfactory to the Buyer. The Seller shall have received the written consent to
the transactions contemplated by this Agreement signed by all of the directors
of Buyer and Buyer Parent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
SELLER
The Seller represents and warrants to the Buyer and Buyer Parent as
follows:
3.1 ORGANIZATION AND QUALIFICATION. Seller is a corporation validly
existing and in good standing under the laws of the State of Delaware, and has
all requisite corporate power and authority to (a) own, lease and operate its
properties and assets as they are now owned, leased and operated and (b) carry
on its business as now presently conducted and as proposed to be conducted.
Seller is duly qualified to do business in each jurisdiction in which the nature
of its business or properties makes such qualification necessary, except where
the failure to do so would not have a Material Adverse Effect.
3.2 SUBSIDIARIES. Seller has no subsidiaries.
3.3. VALIDITY AND EXECUTION OF AGREEMENT. Seller has the full legal right,
capacity and power and all requisite corporate authority and approval required
to enter into, execute and deliver this Agreement and the other agreements or
instruments contemplated hereby, and to perform fully its obligations hereunder
and thereunder. The shareholders and the board of directors of Seller have each
approved the transactions contemplated pursuant to this Agreement and each of
the other agreements to which Seller is a party. This Agreement and such other
agreements and instruments have been duly executed and delivered by Seller and
each constitutes the valid and binding obligation of Seller enforceable against
it in accordance with its terms, except as may be limited by any bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other laws
(whether statutory, regulatory or decisional), now or hereafter in effect,
relating to or affecting the rights of creditors generally or by equitable
principles (regardless of whether considered in a proceeding at law or in
equity).
3.4. NO CONFLICT. Neither the execution and delivery of this Agreement nor
the performance by the Seller of the transactions contemplated hereby will
violate or conflict with (a) any of the provisions of its Articles of
Incorporation, the Bylaws or other organizational documents of the Seller; (b)
or result in the acceleration of, or entitle any party to accelerate the
maturity or the cancellation of the performance of any obligation under, or
result in the creation or imposition of any Lien in or upon the Assets or
constitute a default (or an event which might, with the passage of time or the
giving of notice, or both, constitute a default) under any material contract to
which Seller is a party; or (c) any order, judgment, regulation or ruling of any
Governmental or Regulatory Body to which the Seller is a party or by which any
of it's property or assets may be bound or affected or with any provision of any
law, rule, regulation, order, judgment, or ruling of any Governmental or
Regulatory Body applicable to the Seller other than such violations or conflicts
as do not or will not individually or in the aggregate have a Material Adverse
Effect.
3.5 LITIGATION. There are no outstanding orders, judgments, injunctions,
investigations, awards or decrees of any court, Governmental or Regulatory Body
or arbitration tribunal by which the Seller, or any of its securities, assets,
properties or business is bound. There are no actions, suits, claims,
investigations, legal, administrative or arbitral proceedings pending or, to the
best knowledge of the Seller, threatened (whether or not the defense thereof or
liabilities in respect thereof are covered by insurance) against or affecting
the Seller, or any of its assets or properties, that, individually or in the
aggregate, are reasonably expected to have a Material Adverse Effect.
3.6 THE DATABASE. Seller owns outright and has good title to the Database
free and clear of any Lien. This Agreement and such other conveyancing documents
as shall have been executed and delivered to the Buyer will convey good title to
the Database, free and clear of any Liens. The Assets transferred pursuant
hereto constitute all of the assets necessary and appropriate for the conduct of
the Business as of the date hereof in substantially the same manner as the
Business has heretofore been conducted.
3.7 NO MATERIAL ADVERSE CHANGE Since December 31, 2001, there has been no
material adverse change in the Business, operations or financial condition of
the Seller, or in the assets, liabilities, net worth or properties of the
Seller, and the Seller knows of no such change
that is threatened, nor has there been any damage, destruction or loss which
could have a Material Adverse Effect, whether or not covered by insurance.
3.8 COMPLIANCE WITH LAWS. Except as set forth in Schedule 3.16:
(a) Seller is in compliance with, and Seller has not violated any
applicable law, rule or regulation of any federal, state, local or foreign
government or agency thereof. No notice, claim, charge, complaint, action, suit,
proceeding, investigation or hearing has been received by Seller or filed,
commenced or threatened against Seller, alleging a violation of or liability or
potential responsibility under any such law, rule or regulation which has not
heretofore been duly cured and for which there is no remaining liability.
(b) Seller is not in receipt of notice of, or subject to, any adverse
inspection, finding of deficiency, finding of non-compliance, investigation,
penalty, fine, sanction, assessment, request for corrective or remedial action
or other compliance or enforcement action.
3.9 PURCHASE ENTIRELY FOR OWN ACCOUNT; NO DISTRIBUTION. This Agreement is
made with the Buyer in reliance upon the Seller's representation to the Buyer,
which by the Seller's execution of this Agreement, the Seller hereby confirms
that the Shares to be acquired by the Seller will be acquired for investment for
the Seller's account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that the Seller has no present
intention of selling, granting any participation in, or otherwise distributing
the Shares. By executing this Agreement, the Seller further represents to the
Buyer that the Seller does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to any of the Shares. In addition,
Seller agrees not to distribute (by way of dividend or otherwise) any of the
Shares to its stockholders at any time during the one (1) year period following
the Closing Date.
3.10 RECEIPT OF INFORMATION The Seller has had an opportunity to ask
questions and receive answers from the Buyer regarding the business, properties,
prospects and financial condition of the Buyer and to obtain additional
information necessary to verify the accuracy of any information furnished to the
Seller. In addition, Seller has had an opportunity to review the information
contained in the SEC Reports and had an opportunity to ask questions and receive
answers from the Buyer regarding such information.
3.11 RESTRICTED SECURITIES. The Seller understands that Shares are not
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and that the Shares are being issued pursuant to an exemption from registration
under the Securities Act pursuant to Section 4(2) thereof, which depends upon,
among other things, the bona fide nature of the investment intent and the
accuracy of the Seller's representations as expressed herein. The Seller
understands that the Shares are "restricted securities" under applicable U.S.
federal and state securities laws and that, pursuant to these laws, the Seller
must hold the Shares unless they are registered with the Securities and Exchange
Commission and qualified by state authorities, or an exemption from such
registration and qualification requirements is available. The Seller
acknowledges that the Buyer has no obligation to register or qualify the Shares
for resale. The Buyer further acknowledges that if an exemption from
registration or qualification is available, it may be conditioned on various
requirements including, but not limited to, the time and manner of sale, and the
holding period for the Shares.
3.12 LEGENDS. The Seller understands that the Shares shall bear the
following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SUCH ACT, OR UNLESS THE SELLER HAS RECEIVED AN
OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE COMPANY
AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED"
Any legend required by the Blue Sky laws of any state to the extent such laws
are applicable to the shares represented by the certificate so legended.
3.13 SOLVENCY. As of the Closing Date and after giving effect to the sale
of the Assets and to the transactions contemplated under this Agreement:
(a) The aggregate value of the Seller, as a going concern, exceeds the
amount of all the debts and liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities) of the Seller;
(b) The aggregate value of all liabilities of the Seller is less than the
aggregate value of all assets (including goodwill and other intangible assets)
at a fair valuation of the Seller;
(c) The Seller does not have an unreasonably small capital with which to
conduct their business operations as heretofore conducted;
(d) No final judgments against the Seller, in actions for money damages
with respect to pending or threatened litigation could reasonably be expected to
be rendered at a time when, and in an amount such that, the Seller will be
unable to satisfy any such judgments promptly in accordance with their terms
(taking into account the maximum reasonable amount of such judgments in any such
actions and the earliest reasonable time at which such judgments might be
rendered) and the cash available to the Seller, after taking into account all
other anticipated uses of the cash of the Seller (including the payments on or
in respect of debt), is anticipated to be sufficient to pay all such judgments
promptly in accordance with their terms.
(e) The Seller has not incurred, do not intend to incur, and believe that
it will not incur, liabilities beyond its ability to pay such liabilities as
such liabilities become absolute and mature.
3.14 DISCLOSURE. The representations and warranties contained in this
Section 3 along with the Disclosure Schedule and any other written information,
statement or certificate provided by the Seller, does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements and information contained in this Section 3 and the
Disclosure Schedule not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND BUYER PARENT
The Buyer and Buyer Parent, jointly and severally, represent and warrant
to the Seller as follows:
4.1 ORGANIZATION AND QUALIFICATION. Each of the Buyer and Buyer Parent is
a corporation validly existing and in good standing under the laws of its state
of incorporation and has all requisite corporate power and authority to (a) own,
lease and operate its properties and assets as they are now owned, leased and
operated and (b) carry on its business as now presently conducted and is duly
qualified to do business in each jurisdiction in which the nature of its
business or properties makes such qualification necessary.
4.2 VALIDITY AND EXECUTION OF AGREEMENT. Each of the Buyer and Buyer
Parent has the full legal right, capacity and power and all requisite corporate
authority and approval required to enter into, execute and deliver this
Agreement and any other agreement or instrument contemplated hereby, and to
perform fully its respective obligations hereunder and thereunder. The
respective board of directors of the Buyer and Buyer Parent each has approved to
the extent required by law the transactions contemplated by this Agreement and
each of the other agreements required to be entered into pursuant hereto by the
Buyer and Buyer Parent and no other corporate or shareholder approvals are
required. This Agreement and such other agreements and instruments have been
duly executed and delivered by the Buyer and Buyer Parent and each constitutes
the valid and binding obligation of the Buyer and Buyer parent enforceable
against them in accordance with its terms, except as may be limited by any
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
laws (whether statutory, regulatory or decisional), now or hereafter in effect,
relating to or affecting the rights of creditors generally or by equitable
principles (regardless of whether considered in a proceeding at law or in
equity).
4.3 NO CONFLICT. Neither the execution and delivery of this Agreement nor
the performance by the Buyer or Buyer Parent of the transactions contemplated
herein will violate or conflict with (a) any of the provisions of their
respective Certificates of Incorporation or By-Laws or other organizational
documents of Buyer and Buyer Parent; or (b) result in the acceleration of, or
entitle any party to accelerate the maturity or the cancellation of the
performance of any obligation under, or result in the creation or imposition of
any Lien or constitute a default (or an event which might, with the passage of
time or the giving of notice, or both, constitute a default) under any material
contract to which Buyer or Buyer Parent is a party, other than (1) such contract
violations, accelerations, cancellations, defaults or Liens as do not
individually or in the aggregate have a material adverse effect on Buyer or
Buyer Parent, (2) any order, judgment, regulation or ruling of any Governmental
or Regulatory Body to which the Buyer or Buyer Parent is a party or by which any
of its respective property or assets may be bound or affected or with any
provision of any law, rule, regulation, order, judgment, or ruling of any
Governmental or Regulatory Body applicable to the Buyer or Buyer Parent, other
than such violations or conflicts as do not individually or in the aggregate
have a material adverse effect on Buyer or Buyer Parent.
4.4 SEC REPORTS.
(a) Commencing on January 1, 2002, Buyer Parent has filed with the SEC all
required forms, schedules, reports and documents (collectively, the "SEC
Reports"), each of which has
complied in all material respects with the applicable requirements of the
Securities Act and the Securities Exchange Act of 1934, as amended, and the
related SEC rules and regulations in effect on the date that the SEC Report was
filed.
(b) Commencing on January 1, 2002, no SEC Report, including any financial
statements or schedules included or incorporated by reference in any such
filing, contains any untrue statement of a material fact or omits to state a
material fact required to be stated or incorporated by reference or necessary in
order to make the statements, in light of the circumstances in which made, not
misleading.
(c) Commencing on January 1, 2002, Buyer Parent's consolidated financial
statements included in any SEC filing comply as to form in all material respects
with applicable accounting requirements and the relevant published rules and
regulations of the SEC and fairly present, in conformity with GAAP (except as
may be indicated in the accompanying notes), the consolidated financial position
of Buyer Parent and its consolidated subsidiaries as of the dates indicated and
their consolidated results of operations and cash flows for the periods then
ended (subject, in the case of unaudited interim financial statements, to normal
recurring year-end adjustments).
4.5 NO MATERIAL ADVERSE CHANGE. Since September 30, 2002, there has not
been any material adverse change in Buyer Parent's business or its consolidated
financial position, results of operations, assets or prospects, and no event has
occurred or circumstance exists relating to Buyer Parent specifically that,
individually or in the aggregate, has had or could reasonably be expected to
have a material adverse effect on Buyer Parent's business or its consolidated
financial position, operations, assets or prospects taken as a whole.
4.6 DISCLOSURE. The representations and warranties contained in this
Section 4 along with and any other written information, statement or certificate
provided by the Sellers with the exception of forward looking statements and
projections, do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 4 not misleading.
ARTICLE V
INDEMNIFICATION AND OTHER COVENANTS
5.1 SURVIVAL. Subject to this Section 5.1, all representations,
warranties, covenants and agreements contained in this Agreement, or in any
Section, exhibit, certificate, agreement, document or statement delivered
pursuant hereto shall survive (and not be affected in any respect by) the
Closing and any investigation conducted by any party hereto for a period of two
(2) years.
5.2 INDEMNIFICATION. (a) The Seller agrees to indemnify, defend and hold
harmless the Buyer and Buyer Parent and their respective directors, officers,
employees, shareholders and any Affiliates of the foregoing, and their
successors and assigns (collectively, the "Buyer Group") from and against any
and all losses, liabilities (including punitive or exemplary damages and fines
or penalties and any interest thereon), expenses (including reasonable fees and
disbursements of counsel and expenses of investigation and defense), claims,
Liens or other obligations of any nature whatsoever (hereinafter individually, a
"Loss" and collectively, "Losses") suffered or incurred by the Buyer Group
which, directly or indirectly, arise out of, result from or relate to, (i) any
inaccuracy in or any breach of any representation or warranty of
the Seller contained in Article III, (ii) any breach of any covenant or
agreement of the Seller, in each case contained in this Agreement or in any
other document contemplated by this Agreement, or (iii) any liability of Seller.
(b) The Buyer and Buyer Parent jointly and severally agree to indemnify,
defend and hold harmless the Seller and its respective directors, officers,
employees, and shareholders, and any Affiliates of the foregoing, and their
successors and assigns from and against any and all Losses suffered or incurred
by them which, directly or indirectly, arise out of, result from or relate to
(i) any inaccuracy in or any breach of any representation or warranty of the
Buyer or Buyer Parent contained in Article IV, or (ii) any breach of any
covenant or agreement of the Buyer or Buyer Parent contained in this Agreement
or in any other document contemplated by this Agreement.
5.3 METHOD OF ASSERTING CLAIMS. The party making a claim under this
Article V is referred to as the "Indemnified Party" and the party against whom
such claims are asserted under this Article V is referred to as the
"Indemnifying Party". All claims by any Indemnified Party under this Article V
shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which an Indemnifying Party
would be liable to an Indemnified Party hereunder is asserted against or sought
to be collected from such Indemnified Party by a third party, said Indemnified
Party shall with reasonable promptness notify in writing the Indemnifying Party
of such claim or demand, specifying the nature of the specific basis for such
claim or demand, and the amount or the estimated amount thereof to the extent
then feasible (which estimate shall not be conclusive of the final amount of
such claim and demand; any such notice, together with any notice given pursuant
to Section 5.3(b) hereof, collectively being the "Claim Notice"); provided,
however, that any failure to give such Claim Notice will not be deemed a waiver
of any rights of the Indemnified Party except to the extent the rights of the
Indemnifying Party are actually prejudiced or harmed. The Indemnifying Party,
upon request of the Indemnified Party, shall retain counsel (who shall be
reasonably acceptable to the Indemnified Party) to represent the Indemnified
Party, and shall pay the fees and disbursements of such counsel with regard
thereto, provided, further, that any Indemnified Party is hereby authorized
prior to the date on which it receives written notice from the Indemnifying
Party designating such counsel, to retain counsel, whose reasonable fees and
expenses shall be at the expense of the Indemnifying Party, to file any motion,
answer or other pleading and take such other action which it reasonably shall
deem necessary to protect its interests or those of the Indemnifying Party until
the date on which the Indemnified Party receives such notice from the
Indemnifying Party. After the Indemnifying Party shall retain such counsel, the
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) the named parties of any such
proceeding (including any impleaded parties) include both the Indemnifying Party
and the Indemnified Party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. The Indemnifying Party shall not, in connection with any proceedings or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one such firm for the Indemnified Party (except to the
extent the Indemnified Party retained counsel to protect its (or the
Indemnifying Party's) rights prior to the selection of counsel by the
Indemnifying Party). The Indemnified Party agrees to cooperate with the
Indemnifying Party and its counsel in contesting any claim or demand which the
Indemnifying Party defends. No claim or demand may be settled by an Indemnifying
Party or, where permitted pursuant to this Agreement, by an Indemnified Party
without the consent of the Indemnified Party in the first case or the consent of
the Indemnifying Party in the second case, which consent shall not be
unreasonably withheld, unless such settlement shall be accompanied by a complete
release of the Indemnified Party in the first case or the Indemnifying Party in
the second case.
(b) In the event any Indemnified Party shall have a claim against any
Indemnifying Party hereunder which does not involve a claim or demand being
asserted against or sought to be collected from it by a third party, the
Indemnified Party shall send a Claim Notice with respect to such claim to the
Indemnifying Party. If the Indemnifying Party does not dispute such claim, the
amount of such claim shall be paid to the Indemnified Party within thirty (30)
days of receipt of the Claim Notice.
(c) So long as any right to indemnification exists pursuant to this
Article V, the affected parties each agree to retain all books, records,
accounts, instruments and documents reasonably related to the Claim Notice. In
each instance, the Indemnified Party shall have the right to be kept informed by
the Indemnifying Party and its legal counsel with respect to all significant
matters relating to any legal proceedings. Any information or documents made
available to any party hereunder, which information is designated as
confidential by the party providing such information and which is not otherwise
generally available to the public, or which information is not otherwise
lawfully obtained from third parties or not already within the knowledge of the
party to whom the information is provided (unless otherwise covered by the
confidentiality provisions of any other agreement among the parties hereto, or
any of them), and except as may be required by applicable law or requested by
third party lenders to such party, shall not be disclosed to any third Person
(except for the representatives of the party being provided with the
information, in which event the party being provided with the information shall
request its representatives not to disclose any such information which it
otherwise required hereunder to be kept confidential).
ARTICLE VI
MISCELLANEOUS
6.1 SALES AND TRANSFER TAXES. All required filings under any applicable
Federal, state, foreign or local sales tax, stamp tax or similar laws or
regulations shall be made in a timely manner by the party responsible therefor
under such laws and regulations.
6.2 POST-CLOSING FURTHER ASSURANCES. (a) At any time and from time to time
after the Closing Date at the request of either party, and without further
consideration, the other party will execute and deliver, or cause the execution
and delivery of, such other instruments of sale, transfer, conveyance,
assignment and confirmation and take or cause to be taken such other action as
the party requesting the same may reasonably deem necessary or desirable in
order to transfer, convey and assign more effectively to the requesting party
all of the property and rights intended to be conveyed to such party pursuant to
the provisions of this Agreement.
(b) Seller, Buyer and Buyer Parent agree to report the sale of the
Database for income Tax purposes as a tax-free reorganization under Section
368(a)(1)(C) of the Code (and any corresponding provision of state or local
income tax law).
6.3 NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
given personally, sent by facsimile transmission or sent by prepaid air courier
or certified, registered or express mail, postage prepaid. Any such notice shall
be deemed to have been given (a) when received, if delivered in person, sent by
facsimile transmission and confirmed in writing within three (3) Business Days
thereafter or sent by prepaid air courier or (b) two (2) Business Days following
the mailing thereof, if mailed by certified first class mail, postage prepaid,
return receipt requested, in any such case as follows (or to such other address
or addresses as a party may have advised the other in the manner provided in
this Section 8.3):
If to Seller, to:
XxXxxxxx.xxx Commerce, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000X
Xxxx Xxxxx, F1 33431
with a copy to:
Mintz, Levin, Cohen, Ferris,
Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone Number (000) 000-0000
Telecopier Number (000) 000-0000
If to Buyer or to Buyer Parent to:
Natural Health Trends Corp.
0000 X. XxxXxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone Number (000) 000-0000
with a copy to:
Xxxxx Xxxxxxx Berlack Israels LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Telephone Number (000) 000-0000
Telecopier Number (000) 000-0000
6.4 PUBLICITY. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be made without advance
approval thereof by the Buyer.
6.5 ENTIRE AGREEMENT. This Agreement and the agreements, certificates and
other documents delivered pursuant to this Agreement contain the entire
agreement among the parties with respect to the transactions described herein,
and supersede all prior agreements, written or oral, with respect thereto.
6.6 WAIVERS AND AMENDMENTS. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties hereto or, in the case of a waiver, by
the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof.
6.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to principles
of conflicts of law.
6.8 BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors, assigns
and legal representatives. This Agreement is not assignable except by operation
of law and any other purported assignment shall be null and void.
6.9 VARIATIONS IN PRONOUNS. All pronouns and any variations thereof refer
to the masculine, feminine or neuter, singular or plural, as the context may
require.
6.10 COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
6.11 EXHIBITS AND SCHEDULES. The Exhibits and Schedules, if any, are a
part of this Agreement as if fully set forth herein. All references herein to
Sections, subsections, clauses, Exhibits and Schedules shall be deemed
references to such parts of this Agreement, unless the context shall otherwise
require.
6.12 EFFECT OF DISCLOSURE ON SCHEDULES. Any item, if any, disclosed on any
Schedule shall be deemed to be disclosed in connection with (a) the specific
representation and warranty to which such Schedule is expressly referenced, (b)
any specific representation and warranty which expressly cross-references such
Schedule and (c) any specific representation and warranty to which any other
Schedule to this Agreement is expressly referenced if such other Schedule
expressly cross-references such Schedule.
6.13 HEADINGS. The headings in this agreement are for reference only, and
shall not affect the interpretation of this Agreement.
6.14 SEVERABILITY OF PROVISIONS. If any provision or any portion of any
provision of this Agreement or the application of such provision or any portion
thereof to any Person or circumstance, shall be held invalid or unenforceable,
the remaining portion of such provision and the remaining provisions of this
Agreement, or the application of such provision or portion of such provision as
is held invalid or unenforceable to persons or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby.
6.15 BROKERS. Each party hereto represents and warrants that no broker or
finder is entitled to any brokerage or finder's fee or other commission from
such party, based on
agreements, arrangements or undertakings made by such party, in connection with
the transactions contemplated hereby.
6.16 CONFIDENTIAL INFORMATION. Seller shall not at any time subsequent to
the Closing, except as explicitly requested by Buyer, use for any purpose,
disclose to any person, or keep or make copies of documents, tapes, discs,
programs or other information storage media ("records") containing, any
confidential information concerning the Business, the Assets, all such
information being deemed to be transferred to Buyer hereunder, and if at any
time after Closing Seller should discover that they are in possession of any
records containing the confidential information of Buyer, then the party making
such discovery shall immediately turn such records over to Buyer, which shall
upon request make available to the surrendering party any information contained
therein which is not confidential information. Buyer and Buyer Parent shall not
resale the Seller's Database or use it for any other purpose other than in the
Buyer's normal course of business.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXXXXXX.XXX COMMERCE, INC.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxx
Title: C.E.O.
NATURAL HEALTH TRENDS CORP.
By: /s/ Xxxx Xxxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxxx
Title: President and Chief Financial Officer
LIGHTHOUSE MARKETING CORPORATION
By: /s/ Xxxx Xxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxx
Title: President and Chief Financial Officer
