ASSET PURCHASE AGREEMENT AMONG LY Retail LLC AND eOPULENCE, LLC. AS OF FEBRUARY 22, 2012, as revised
ASSET PURCHASE AGREEMENT AMONG
LY Retail LLC
AND
eOPULENCE, LLC.
AS OF FEBRUARY 22, 2012, as revised
TABLE OF CONTENTS | ||
Page | Page | |
SECTION 1. DEFINITIONS | 1 | |
SECTION 2. BASIC TRANSACTION. | 1 | |
(a) | Purchase and Sale of Assets | 7 |
(b) | Assumption of Liabilities | 7 |
(c) | Purchase Price | 7 |
(d) | The Closing | 7 |
(e) | Deliveries at the Closing | 7 |
(f) | Intentionally Omitted | 8 |
(g) | Intentionally Omitted | 8 |
(h) | Release of Certain Escrow Shares | 8 |
(i) | Allocation of Purchase Price | 8 |
(j) | Fractional Shares | 8 |
(k) | Access to Records | 8 |
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER | 8 | |
(a) | Organization and Corporate Power of Seller | 8 |
(b) | Authorization of Transaction | 8 |
(c) | Noncontravention | 9 |
(d) | Brokers' Fees | 9 |
(e) | Title to Assets | 9 |
(f) | Financial Statements | 9 |
(g) | Events Subsequent to February 22, 2012 | 10 |
(h) | Stock Ownership | 10 |
(i) | Undisclosed Liabilities | 10 |
(j) | Legal Compliance | 10 |
(k) | Tax Matters | 10 |
(l) | Real Property | 11 |
(m) | Intellectual Property | 11 |
(n) | Tangible Assets | 12 |
(o) | Inventory | 12 |
(p) | Contracts | 12 |
(q) | Predominant Customers | 12 |
(r) | Change in Customers or Vendors | 13 |
(s) | Notes and Accounts Receivable | 13 |
(t) | Insurance | 13 |
(u) | Product Liability | 13 |
(v) | Product Warranty | 13 |
(w) | Litigation | 13 |
(x) | Employees | 14 |
(y) | Employee Benefits | 14 |
(z) | Environment, Health and Safety | 14 |
(aa) | Intentionally Omitted | 14 |
(bb) | Disclosure | 14 |
(cc) | Processing of Returns | 14 |
(dd) | Investment | 14 |
(ee) | Guaranties | 14 |
(ff) | Cure | 14 |
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER | 15 | |
(a) | Organization of Buyer | 15 |
(b) | Authorization of Transaction | 15 |
(c) | Noncontravention | 15 |
(d) | Brokers' Fees | 15 |
(e) | Litigation | 15 |
(f) | Disclosure | 15 |
(g) | Cure | 15 |
SECTION 5. COVENANTS | 16 | |
(a) | Further Assurances | 16 |
(b) | Confidentiality | 16 |
(c) | Closing Date Financial Statements | 16 |
(d) | Indemnification Provisions for the Benefit of Buyer | 16 |
(e) | Indemnification Provisions for the Benefit of Seller | 17 |
(f) | Indemnification Matters Involving Third Parties | 17 |
(g) | Intentionally Omitted | 18 |
(h) | Other Indemnification Provisions | 18 |
(i) | Fraud | 18 |
(j) | Records | 19 |
(k) | Third Party Consents | 19 |
(l) | Non-Compete | 19 |
(m) | Risk of Loss; Condemnation | 19 |
(n) | Tax Return Filing and Payment | 20 |
(o) | General | 20 |
(p) | Operation of Business | 20 |
(q) | Preservation of Business | 20 |
(r) | Full Access | 21 |
(s) | No Solicitation | 21 |
(t) | Material Adverse Change | 21 |
(u) | Transfer Taxes | 21 |
(v) | Satisfaction of Excluded Liabilities | 21 |
(w) | Employee Benefit Matters | 21 |
(x) | Use of Trademark "eOPULENCE” | 22 |
(y) | Letters of Credit | 22 |
(z) | Payment of Certain Assumed Liabilities | 22 |
SECTION 6 CONDITIONS TO OBLIGATION TO CLOSE | 22 | |
(a) | Conditions to Obligation of Buyer | 22 |
(b) | Conditions to Obligation of Seller | 23 |
SECTION 7 CLOSING DOCUMENTS | 24 | |
(a) | Seller Deliveries | 24 |
(b) | Buyer Deliveries | 25 |
SECTION 8 TERMINATION | 26 | |
(a) | Method of Termination | 26 |
(b) | Rights Upon Termination | 26 |
SECTION 9. ARBITRATION OF DISPUTES | 27 | |
(a) | Mandatory Arbitration | 27 |
(b) | Arbitrator's Qualifications and Selection | 27 |
(c) | Governing Law; Written Decision | 27 |
(d) | Procedures; Evidence; Experts | 27 |
(e) | Costs | 27 |
(f) | Consent to Jurisdiction | 27 |
(g) | Injunctive Relief | 27 |
(h) | Indemnification | 28 |
(i) | Survival | 28 |
(j) | WAIVER OF JURY TRIAL; EXEMPLARY DAMAGES | 28 |
(k) | Interest | 28 |
SECTION 10. OTHER AGREEMENTS | 28 | |
(a) | Lockup of the Shares | 28 |
(b) | Press Releases and Public Announcements | 28 |
(c) | HSR and Other Filings | 28 |
(d | No Third-Party Beneficiaries | 28 |
(e) | Entire Agreement | 28 |
(f) | Succession and Assignment | 29 |
(g) | Counterparts | 29 |
(h) | Headings | 29 |
(i) | Notices | 29 |
(j) | Governing Law | 29 |
(k) | Amendments and Waivers | 30 |
(l) | Severability | 30 |
(m) | Expenses | 30 |
(n) | Construction | 30 |
(o) | Incorporation of Exhibits and Schedules | 30 |
(p) | Taxable Asset Purchase | 30 |
(q) | Further Actions | 30 |
(r) | Time of the Essence | 30 |
(s) | Bulk Sales | 30 |
Exhibits Under the Asset Purchase Agreement
Exhibit A | Non-Qualified Stock Option Agreement | 38 |
Exhibit B | Lock-Up Agreement | 42 |
Exhibit C | Form of Xxxx of Sale, Assignment and Assumption Agreement | 47 |
Schedules Under the Asset Purchase Agreement | |
Schedule 1.1(a) | Tangible Personal Property |
Schedule 1.1(b) | Intellectual Property Included in Acquired Assets |
Schedule 1.1(c) | Assumed Contracts |
Schedule 1.1(d) | Receivables Included in Acquired Assets |
Schedule 1.1(f) | Governmental Permits, Rights, Etc. Included in Acquired Assets |
Schedule 1.1(i) | Prepaid Expenses Included in Acquired Assets |
Schedule 1.2 | Excluded Assets |
Schedule 1.3 | Assumed Liabilities and Obligations |
Schedule 3(a) | D.B.A., Assumed and Fictitious Names |
Schedule 3(d) | Brokers' Fees |
Schedule 3(g) | Subsequent Events |
Schedule 3(l)(i) | Owned Real Property |
Schedule 3(l)(ii) | Real Property Leased or Subleased to Seller |
Schedule 3(m)(i) | Intellectual Property Infringement |
Schedule 3(m)(ii) | Certain Intellectual Property of Seller |
Schedule 3(m)(iii) Grant of Rights to Intellectual Property of Seller | |
Schedule 3(m)(iv) | Certain Intellectual Property Used by Seller |
Schedule 3(o) | Inventory |
Schedule 3(p) | Contracts |
Schedule 3(s) | Collectability of Receivables |
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This Asset Purchase Agreement (this "Agreement") is entered into as of February 22, 2012 among LY Retail, LLC, a California limited liability company ("Buyer"), eOPULENCE, LLC a New York limited liability Company ("Seller"). Buyer and Seller are referred to collectively herein as the "Parties."
This Agreement contemplates a transaction in which Buyer will, on the terms and conditions set forth herein, purchase all of the assets and assume certain of the liabilities of Seller for the consideration specified herein.
SECTION 1. DEFINITIONS:
Capitalized terms used herein and not otherwise defined herein are defined in Appendix I to this Agreement.
SECTION 2. BASIC TRANSACTION:
(a) Purchase and Sale of Assets:
Upon the Closing (as defined below) pursuant to this Agreement and subject to the terms hereof, Buyer will purchase from Seller and Seller will sell, transfer, convey and deliver to Buyer, all of their respective right, title and interest in and to the Acquired Assets.
(b) Assumption of Liabilities:
Upon the Closing pursuant to this Agreement and subject to the terms hereof and in consideration of the purchase by Buyer of the Acquired Assets, Buyer shall assume and become responsible for the Assumed Liabilities. Buyer will not assume or have any responsibility, however, with respect to any obligation or liability of Seller not included within the definition of Assumed Liabilities.
(c) Purchase Price:
In consideration of the purchase by Buyer of the Acquired Assets and the assumption of the Assumed Liabilities, Buyer agrees to pay to Seller an aggregate purchase price (the "Purchase Price") consisting of options to purchase three hundred thousand (300,000) shares, (the “Option Shares”) of the common stock, $.0001 par value per share, (the "Common Stock") of Buyer (the "Shares") with a strike price of $0.30 per share. Seller hereby agrees to enter into the following agreements: (i) a Non-Qualified Stock Option Agreement attached as Exhibit A hereto (the "NQSO Agreement"), and (ii) a lock-up agreement attached as Exhibit B hereto (the "Lock-Up Agreement").
(d) The Closing:
The closing of the transactions contemplated hereby (the "Closing") shall take place at the offices of Buyer at 10:00 a.m. on such date and time as the Parties shall agree, following (or simultaneously with) the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (the date of the Closing is referred to as the "Closing Date").
(e) Deliveries at the Closing:
At the Closing, the following documents shall be executed and delivered and the following actions shall occur: (i) Seller shall deliver to Buyer the various documents referred to in Section 7(a) below; (ii) Buyer shall deliver to Seller the various certificates, instruments and documents referred to in Section 7(b) below; (iii) Seller shall execute, acknowledge (if appropriate) and deliver to Buyer: (A) a xxxx of sale, assignment and assumption agreement for the Acquired Assets and the Assumed Liabilities in the form of Exhibit C hereto (the "Xxxx of Sale"), (B) assignment documents with respect to certain of the Acquired Assets (including Intellectual Property transfer documents) in the forms attached hereto as Exhibit D hereto (the "Assignment Documents") and (C) such other instruments of sale, transfer, conveyance and assignment as Buyer and its counsel have reasonably requested for the sale, transfer, conveyance and assignment of the Acquired Assets free and clear of all Security Interests, other than as specifically agreed upon herein, and (iv) Buyer shall execute, acknowledge (if appropriate) and deliver to Seller (A) the Xxxx of Sale and (B) such other instruments of assumption as Seller and its counsel have reasonably requested for the assumption of the Assumed Liabilities.
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(f) Intentionally Omitted:
(g) Intentionally Omitted:
(h) Intentionally Omitted:
(i) Allocation of Purchase Price: The consideration paid by Buyer to Seller pursuant to this Agreement shall be allocated among the Acquired Assets, including any intangible assets, as Seller and Buyer have mutually agreed on or prior to the date hereof. The allocation of the Purchase Price was bargained and negotiated for and each party agrees to report the transactions contemplated hereby for Federal income Tax and all other Tax purposes (including, without limitation, for purposes of Section 1060 of the Code) in a manner consistent with the allocation set forth on Exhibit E determined pursuant to this Section 2(i) and in accordance with all applicable rules and regulations and to take no position inconsistent with such allocation in any administrative or judicial examination or other proceeding. Each of Buyer and Seller shall timely file the appropriate forms in accordance with the requirements of Section 1060 of the Code and this Section 2(i).
(a) Organization and Corporate Power of Seller: Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of New York and Seller has all requisite corporate power and authority to own, lease and operate the Acquired Assets and to carry on the Business. Seller neither owns or leases any real property nor has any employees, sales representatives, agents or inventory in any state of the United States other than the States of New York (except pre-paid inventory that may possibly be in transit) and there are no other jurisdictions in which the nature of the business of Seller or the locations of the Acquired Assets requires Seller to obtain qualification or licensing to do business as a foreign corporation, except where the failure to so qualify or become licensed would not have a Material Adverse Effect. Seller has no Subsidiaries and does not, directly or indirectly, conduct any of the Business through, or have any investment or other interest in, any Person.
(b) Authorization of Transaction: Seller has full corporate power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder. Without limiting the generality of the foregoing, the Board of Directors and the requisite stockholders of Seller has duly authorized the execution, delivery and performance of this Agreement by Seller in accordance with applicable law including the General Corporation Law of the State of New York and the provisions of the Certificate of Incorporation and Bylaws of Seller. This Agreement and the other Transaction Documents to which it is a party constitute the valid and legally binding obligations of Seller, enforceable in accordance with their respective terms and conditions, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and to general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law). Seller represents and warrants that no other third party consents are necessary or required for this asset purchase agreement to consummate between the Parties.
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(c) Noncontravention: Subject to compliance with the HSR (Xxxx-Xxxxx-Xxxxxx) Act, neither the execution and the delivery of this Agreement, the other Transaction Documents or the other documents contemplated hereby and thereby, nor the consummation of the transactions contemplated hereby and thereby will (i) violate any Law or Order of any Governmental Body or court to which Seller or any of the Acquired Assets or Assumed Liabilities are subject or any provision of the Certificate of Incorporation and Bylaws of either Seller or (ii) 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 Contract to which either Seller is a party or by which it is bound or to which any of its assets are subject (or result in the imposition of any Security Interest upon any of their assets), except where the violation, conflict, breach, default, acceleration, termination, modification, cancellation, failure to give notice or other specified occurrence would not have a Material Adverse Effect. Seller does not need to give any notice to, make any filing with, or obtain any authorization, consent or approval of any Governmental Body or other Person in order for the Parties to consummate the transactions contemplated by this Agreement (including the execution, delivery and performance of the assignments and assumptions referred to in Section 2 of this Agreement), except where the failure to give notice, to file, or to obtain any authorization, consent or approval would not have a Material Adverse Effect.
(d) Brokers' Fees: Seller represents and warrants that Seller does not have any Liability or obligation to pay any fees or commissions or other compensation to any broker, finder or agent with respect to the transactions contemplated by this Agreement for which Buyer could become liable or obligated.
(e) Title to Assets: Seller has good and valid title to, or a valid leasehold interest in or the right to use, as the case may be, all of the Acquired Assets, free and clear of all Security Interests. Without limiting the generality of the foregoing Seller has good and valid title to, or the right to use the Website Names and associated logos, if any, free and clear of any Security Interest or restriction on transfer. On the Closing Date, Buyer will receive good and valid title to, or a valid leasehold interest in or the right to use, as the case may be, the Acquired Assets, free and clear of any Security Interest or restriction on transfer (except for Security Interests and restrictions on transfer imposed as a result of actions or agreements of Buyer). Upon Closing, the Acquired Assets, together with the license provided by Seller's Affiliate to Buyer pursuant to the License Agreement and the services to be provided by Parent to Buyer in accordance with the Service Agreement, shall be all the assets and services necessary to permit Buyer to conduct the Business as presently conducted by Seller. Upon Closing, none of the Excluded Assets shall be necessary to permit Buyer to conduct the Business as it is presently conducted by Seller.
(f) Financial Statements:
(i) At or prior to Closing, Seller shall have delivered to Buyer true and complete copies of the following financial statements (collectively the "Historical Financial Statements") of Seller: the audited balance sheet as at December 30, 2011, and the related statements of income, retained earnings and cash flows for the fiscal year then ended, audited by Seller's Accountant. For purposes of this Agreement, December 30, 2011 is referred to herein as the "Most Recent Fiscal Year End," and the balance sheet referred to in the previous sentence as of December 30, 2011 is referred to herein as the "Most Recent Balance Sheet"). The Historical Financial Statements (including the notes thereto) will have been prepared from the books and records of the Seller in accordance with GAAP applied on a consistent basis throughout the periods covered thereby and the Historical Financial Statements will present fairly, in all material respects, the financial condition of Seller as of such dates and the results of operations of Seller for such periods.
(ii) Seller has delivered to Buyer true and complete copies of the unaudited balance sheet of Seller as of January 27, 2012 (the "January 2012 Balance Sheet") and the related unaudited statements of income, retained earnings and cash flows of Seller for the six-month period then ended (collectively, the "January 2012 Financial Statements"). The January 2012 Financial Statements have been prepared by Seller from the books and records of Seller in accordance with GAAP consistent with Seller's past practice in the preparation of its interim financial statements, and the January 2012 Financial Statements present fairly, in all material respects, the financial condition of Seller as of the date, and the results of operations of Seller for the six-month period then ended, subject to normal recurring year-end adjustments and the lack of footnotes and other presentation items. The Closing Date Balance Sheet will contain an adequate reserve, in accordance with GAAP, for any awards payable pursuant to any sweepstakes currently being conducted by Seller.
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(g) Events Subsequent to January 27, 2012: Since January 27, 2012, there has not been any Material Adverse Effect and none of the officers or directors of Seller has Knowledge of any such event, circumstance or change which is threatened. Without limiting the generality of the foregoing, since that date: (i) Seller has not sold, leased, transferred or assigned any material assets (individually or in the aggregate), tangible or intangible; (ii) No Person, including Seller, has accelerated, terminated, made material modifications to, or canceled any material Contract to which Seller is a party or by which it is bound; (iii) No Person, including Seller, has imposed any Security Interest upon any of Seller's assets, tangible or intangible; (iv) Seller has not made any material capital expenditures; (v) Seller has not made any material investment in, or any material loan to, any other Person; (vi) Seller has not created, incurred, assumed or guaranteed more than $10,000 individually or $25,000 in the aggregate in indebtedness for borrowed money and capitalized lease obligations; (vii) Seller has not granted any license or sublicense of any material rights (individually or in the aggregate) under or with respect to any Intellectual Property; (viii) There has been no change made or authorized in the Certificate of Incorporation or in the Bylaws or other organizational documents of Seller; (ix) Seller has not, directly or indirectly, distributed to either Parent or any of its Affiliates or with respect to its capital stock, any of the Acquired Assets other than the amount of cash, if any, not included in the Acquired Assets; (x) Seller has not experienced any material damage, destruction or loss (whether or not covered by insurance) to any of its properties or assets; (xi) Seller has not made any loan to, or entered into any other transaction (other than a transaction described in clause (xii) below) that could be Buyer's obligation after the Closing with, any of its stockholders, directors, officers or employees; (xii) Except for oral agreements entered into in the Ordinary Course of Business providing solely for employment at will, Seller has not entered into any employment Contract or collective bargaining agreement, written or oral, or modified the terms of any existing such Contract or agreement; (xiii) Seller has not granted any increase in the base compensation of any of its officers or non-officer employees, in each case other than in the Ordinary Course of Business; (xiv) Except as contemplated by the provisions of this Agreement, Seller has not adopted or terminated or, in any material respect, amended or modified, any bonus, profit-sharing, incentive, severance or other plan, Contract or commitment for the benefit of any of its directors, officers or employees (or taken any such action with respect to any other employee benefit plan, Contract or arrangement); (xv) Seller has not made any other material change in employment terms for any of its officers or employees other than in the Ordinary Course of Business; (xvi) Seller has kept in full force and effect insurance comparable in amount and scope to coverage maintained by it as of the Most Recent Fiscal Year End and required pursuant to any material agreement, instrument or document to which it is a party; (xvii) Seller has not made any material change in any method of accounting, or accounting principle, method or practice; (xviii) Seller has not settled, released or forgiven any material claim or litigation or waived any material right; (xix) Seller has not committed to do any of the foregoing; and (xx) Seller has conducted the Business in the Ordinary Course of Business and has used its commercially reasonable efforts to preserve its goodwill intact.
(h) Stock Ownership: Seller is the beneficial and record owner of 100 % of beneficial interest of the company
(i) Undisclosed Liabilities: Seller has no material Liabilities, except for (i) liabilities set forth on the January 2012 Balance Sheet which have arisen in the Ordinary Course of Business and in connection with and for the benefit of the Acquired Assets; and (ii) liabilities which have arisen after the date of the January 2012 Balance Sheet in the Ordinary Course of Business and in connection with and for the benefit of the Acquired Assets.
(j) Legal Compliance: Seller has complied with all applicable Laws and Orders of all Governmental Bodies and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand or notice has been filed or, to the Knowledge of the officers or directors of either Parent or Seller, has been commenced against Seller alleging any failure so to comply, except where the failure to comply with any of the above would not have a Material Adverse Effect.
(k) Tax Matters:
(i) Seller has filed all Tax Returns that it was required to file. All such Tax Returns were correct and complete in all material respects. All Taxes owed by Seller (whether or not shown on any Tax Return) have been paid. Seller currently is not the beneficiary of, or subject to, any extension of time within which to file any Tax Return.
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(ii) There is no material dispute or claim concerning any Tax liability of Seller either formally asserted or raised, or, to the Knowledge of the directors or officers of Seller, threatened by any Governmental Body.
(iii) Seller has reported and duly paid state and local sales and use Taxes in all states in which it is required to report and pay such Taxes, including sales and/or use Taxes on sales of merchandise and on catalogs and other promotional materials.
(iv) There is no material dispute or claim of Liability against Seller for sales or use Taxes either formally asserted or raised or, to the Knowledge of the directors or officers of either Seller , threatened by any Governmental Body.
(l) Real Property:
(i) Seller currently rents warehouse space (the “Warehouse”) located at 00 Xxxxxxxx Xxxxxx Xxxxxxxx Navel Yard, Unit 000 Xxxxxxxx #0, Xxxxx #0, Xxxxx 000X Xxxxxxxx, XX 00000 from Xxx Xxxxx. Seller represents and warrants that Buyer will be allowed to sublet the Warehouse under the same terms and conditions provided to Seller if Buyer elects to sublet the Warehouse.
(m) Intellectual Property:
(i) Seller has not interfered with, infringed upon, misappropriated, or violated any material Intellectual Property rights of any Person in any material respect and Seller has not received any pending charge, complaint, claim, demand or notice alleging any such interference, infringement, misappropriation or violation (including any claim that Seller must license or refrain from using any Intellectual Property rights of any Person). To the Knowledge of the directors or officers of Seller after reasonable investigation customary in the industry, no third party has interfered with, infringed upon, misappropriated or violated any of the service marks Seller or the E-Mail Lists or Mailing Lists (if any) of Seller in any material respect. To the Knowledge of the directors or officers of either Seller, no third party has interfered with, infringed upon, misappropriated or violated any other Intellectual Property rights of Seller in any material respect.
(ii) Prior to the Closing Date Seller shall provide Buyer with each registered and unregistered trademark and service xxxx and applications therefore, material trade name, domain name, fictitious and d.b.a. name, 800- or 888-prefix phone number (if applicable), and other identifier used by Seller in connection with any aspect of the Business (and, if applicable, with respect to such 800- or 888- prefix phone numbers, Seller will use commercially reasonable efforts to obtain from its long distance carrier consent to the assignment and transfer of all such phone numbers and related rights to Buyer as of the Closing Date). With respect to each item of Intellectual Property required to be identified by Seller: (A) Seller possesses all right, title and interest in and to, or otherwise has the right to use, without payment to any person, the item, free and clear of any Security Interest, or other restriction, including, without limitation, all rights to the Catalog Names and associated logos; (B) the item is not subject to any outstanding Order; (C) the item has not lapsed, expired or been abandoned; (D) no Claim is pending or, to the Knowledge of the directors or officers of either Seller , is threatened, which challenges the legality, validity, enforceability, use or ownership of the item or application, registration or grant therefore; and (E) Other than in the Ordinary Course of Business, Seller has not agreed to indemnify any Person for or against any interference, infringement, misappropriation or other conflict with respect to the item.
(iii) Seller represents and warrants that Seller has not granted a material license, sublicense, agreement or other Contract or other permission, whether written or oral, which is currently in effect to which Seller has granted to any other party any rights with respect to any of its Intellectual Property.
(iv) Seller represents and warrants that Seller has not exploited to its own benefit an item of Intellectual Property that any other party owns and that Seller uses pursuant to a license, sublicense, agreement or other Contract or permission.
(v) The Intellectual Property list that Seller will provide to Buyer constitutes each material item of all of the Intellectual Property used in or necessary for the conduct of the Business.
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(vi) Seller possesses all rights and interests necessary to (A) sell all merchandise currently sold through Seller's website(s) and other marketing materials and (B) to use the names and/or likenesses of persons used in such website(s) for the specific purpose and in the specific catalogs in which such likenesses appeared, in the case of both (A) and (B), without infringing the Intellectual Property rights of any other Person. To the Knowledge of the directors or officers of Seller after reasonable investigation customary in the industry, each Person from which Seller acquires products and goods (1) obtained or made and sold such products and goods without violation of the Intellectual Property or other rights of any Person, (2) has all rights and permissions necessary to distribute such products and goods to Seller, and (3) has all rights and permissions necessary to grant to Seller the right to redistribute such products and goods.
(vii) All mailing/customer lists, maintained by Seller in the Ordinary Course of Business, of all customers who have purchased Seller's products, including without limitation through Seller's website, catalogs and newspaper FSI (free-standing insert) programs (if the last two are applicable) and through its Affiliates' (the "Mailing Lists"); (B) contain all names and addresses of customers who have in the past purchased a product from Seller, and can be sorted to indicate which customers have purchased products (1) within 12 months prior to the Closing Date, (2) 12-24 months prior to the Closing Date, (3) 24-36 months prior to the Closing Date, and (4) more than 36 months prior to the Closing Date; and (C) include a detailed transaction listing, with original source data including the names and addresses, of people who have inquired about Seller's products during the previous 60 days although they may not have yet purchased. The use of the mailing lists by Seller does not violate, without limitation, Intellectual Property rights and rights of publicity or privacy of any Person, and is not in violation of any applicable Law or Order. There is no limitation on the right of Seller to transfer to Buyer any of the Mailing Lists.
(viii) Seller acknowledges and agrees that all Mailing Lists used for the Business and the Acquired Business will be the exclusive property of Buyer and Seller shall not be entitled to retain a copy of same or use the information from such Mailing Lists for any purpose whatsoever.
(n) Tangible Assets: The machinery, equipment (including the computer software technology, telephone and telecommunication systems) and other tangible assets that Seller owns, leases or uses in the Business are free from material defects, have been maintained in accordance with normal industry practice, are in good operating condition and repair (subject to normal wear and tear), are suitable for their intended use and have met all fulfillment service and call service needs and performance standards required of Seller relating to the Business as heretofore conducted
(o) Inventory: At the Closing, Seller will set forth a complete standard cost inventory detail listing of all inventory owned by Seller as of a date within five days of the Closing Date. Seller agrees to endeavor to sell such inventory on a consignment basis and Seller and Buyer shall enter into a separate consignment agreement setting forth the terms and conditions of said consignment of the inventory.
(p) Contracts: Prior to closing Seller shall provide Buyer with a list of all material Contracts to which Seller is a party or by which Seller or any of the Acquired Assets may be bound or subject. Seller will delivered to Buyer a correct and complete copy of each written material Contract. With respect to each such Contract: (i) the Contract is legal, valid, binding, enforceable and in full force and effect in all material respects; (ii) Seller is not, and to the Knowledge of the directors or officers of Seller, and no other party is in material breach or default and, to the Knowledge of the directors or officers of Seller, no event of has occurred which, with notice or lapse of time or both, would constitute a material breach or default or permit termination, modification or acceleration under the Contract; (iii) no party has repudiated any material provision of the Contract or indicated to any director or officer of Seller of its intent to cancel or not renew the Contract; (iv) no consent is required of any party thereto to transfer the benefits of each such Contract to Buyer in connection with the transactions contemplated in this Agreement. For purposes of this Section 3(p), a "material" Contract shall mean a Contract providing for the payment by or to Seller of $25,000 or more annually.
(q) Predominant Customers: No single customer of Seller accounts or accounted for over five percent (5%) of the total revenues of Seller during any of the three (3) complete fiscal years immediately preceding the date of this Agreement.
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(r) Change in Customers or Vendors: No customer or vendor whose annual volume of purchases or sales during Seller's fiscal year ended December 27, 2011 or during the period between the Most Recent Fiscal Year End and the Closing Date exceeded $50,000, has indicated to Seller or to any of Seller's officers or directors that it intends to cease doing business with Seller or materially alter the amount or pricing of the business done with Seller.
(s) Notes and Accounts Receivable: All notes and accounts receivable of Seller are reflected properly on its books and records, are valid receivables subject to no setoffs or counterclaims, and are current and collectible in accordance with their terms at their recorded amounts, subject only to the reserve for bad debts set forth on the face of the Most Recent Balance Sheet as adjusted in a manner consistent with past practice for operations and transactions in the Ordinary Course of Business through the Closing Date or as will be set forth on the Closing Date Net Tangible Assets Statement. If, at any time after the Closing Date, Buyer deems any such account receivable uncollectible, such account receivable shall be assigned to Seller; provided, however, that Seller shall remain obligated to indemnify Buyer for any claim arising from or in connection with such account receivable pursuant to Section 5(d) of this Agreement.
(t) Insurance: Seller represents and warrants that Seller has supplied Buyer with a copy of each insurance policy (including policies providing property, casualty, liability and workers' compensation coverage and bond and surety arrangements) with respect to which Seller is or is required to be (pursuant to the provisions of any agreement or license or other Contract to which it is party) a party, a named insured, or otherwise the beneficiary of coverage. With respect to each such insurance policy: (i) the policy is legal, valid, binding, enforceable and in full force and effect in all material respects; (ii) neither Seller nor any other party to the policy is in material breach or default (including with respect to the payment of premiums or the giving of notices), and no event has occurred which, with notice or the lapse of time or both, would constitute a material breach or default, or permit termination, modification or acceleration under the policy; (iii) no party to the policy has repudiated any material provision thereof; and (iv) Seller has not been notified by any of its insurance carriers that any premiums will materially increase in the future or that any insurance coverage provided by such policy will not be available to Seller in the future on substantially the same terms as now in effect.
(u) Product Liability: To the Knowledge of the directors or officers of either Seller after reasonable investigation customary in the industry, except as set forth in Schedule 3(w), Seller does not have any material liability (whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due) arising out of any injury to individuals or property as a result of the ownership, possession, or use of any product manufactured, sold, leased, or delivered by Seller.
(v) Product Warranty: All of the products manufactured, sold, leased or delivered by Seller have conformed in all material respects with all applicable contractual commitments, with all express and implied warranties, and with all applicable Laws and Seller has no material Liability for replacement or repair thereof or other damages in connection therewith, subject only to the reserve for product refunds or product warranty claims set forth on the face of the Most Recent Balance Sheet (or in any notes thereto) as adjusted for operations and transactions in the Ordinary Course of Business through the Closing Date. Substantially all of the products manufactured, sold, leased or delivered by Seller are subject to Seller's standard terms and conditions of sale or lease. Schedule 3(v) includes copies of the standard terms and conditions of sale or lease for Seller (containing applicable guaranty, warranty and indemnity provisions).
(w) Litigation: Seller represents and warrants that Seller (i) is not subject to any outstanding Order or (ii) is not a party or, to the Knowledge of the directors or officers of either Seller, is threatened to be made a party to any Claim of, in, or before any Governmental Body or before any arbitrator, which could reasonably be expected to have a Material Adverse Effect. The Most Recent Balance Sheet reflects an adequate reserve for any Adverse Consequences that Seller may reasonably be expected to suffer from any such Order or event specified in the preceding sentence. Without limiting the generality of the foregoing, Seller has no material Liability arising out of any injury (or alleged injury) to individuals or property as a result of the ownership, possession, or use of any product manufactured, sold, leased or delivered by Seller.
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(x) Employees: Prior to the Closing Date Seller shall provide Buyer with a complete list of employees of Seller, including the position or title of each employee of Seller which shall also include the current annual compensation of each such employee. Seller has not received oral or written notice that any executive, key employee or significant group of employees plans to terminate employment with Seller as a result of the transactions contemplated by this Agreement or otherwise during the next 12 months. Seller is not a party to or bound by any collective bargaining agreement or other Contract with a labor union or association representing any employee, nor has it experienced any strike, work slowdown or stoppage, or material grievance, claim of unfair labor practices, or other collective bargaining dispute within the past three years. Seller has not committed any material unfair labor practice. None of the directors or the officers of Seller has any Knowledge of any organizational effort presently being made or threatened by or on behalf of any labor union with respect to employees of Seller.
(y) Employee Benefits: There are no employee benefit plans or arrangements or understandings of any type (whether or not described in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended and the regulations thereunder, including, without limitation, plans or arrangements with employees providing for deferred compensation, severance, bonuses, stock options, fringe benefits, cafeteria plan deferrals, flexible arrangements or other similar plans or arrangements), of Seller under which Seller has or Buyer in the future could have, directly or indirectly, any liability with respect to any current or former employee of Seller.
(z) Environment, Health and Safety: Except as would not have a Material Adverse Effect, to the Knowledge of the directors or officers of either Seller after reasonable investigation customary in the industry, Seller: (i) is in material compliance with all applicable Environmental, Health and Safety Laws; (ii) there is no judgment or Claim pending or, to the Knowledge of the directors or officers of either Seller, threatened against Seller pursuant to Environmental, Health and Safety Laws or principles of common law relating to pollution, protection of the environment or health and safety; and (iii) there are no past or present events, conditions, circumstances, activities, practices, incidents, agreements, actions or plans which may prevent compliance in all material respects with Environmental, Health and Safety Laws, or which have given rise to any Claim in connection therewith.
(aa) Intentionally Omitted:
(bb) Disclosure: The representations and warranties of Seller contained in this Agreement and made herein in connection with the documents included in the Schedules hereto do not (i) contain any untrue statement of a material fact or (ii) omit to state any material fact necessary in order to make the statements and information contained in this Agreement and in such documents not misleading. Except for the representations and warranties of Seller contained in this Agreement and the Transaction Documents, Seller shall be deemed to have made any representation, warranty or covenant whatsoever pertaining to the Acquired Assets, the Business or any other matter.
(cc) Processing of Returns: Seller has consistently and timely processed all customer claims with respect to returns of sold products.
(dd) Investment: Seller (i) understands that the Option Shares have not been, and will not be, as of the Closing, registered under the Securities Act, or under any state securities laws, and are being offered and sold in reliance upon Federal and state exemptions for transactions not involving any public offering, (ii) is acquiring such Option Shares solely for its own account for investment purposes, and not with a view to the distribution thereof, (iii) is a sophisticated investor with knowledge and experience in business and financial matters, (iv) has received certain information concerning Buyer and has had the opportunity to obtain additional information concerning Buyer as desired in order to evaluate the merits and the risks inherent in holding such Option Shares, (v) is able to bear the economic risk and lack of liquidity inherent in holding such Option Shares.
(ee) Guaranties: Seller is not a guarantor or otherwise is responsible for any liability or obligation (including indebtedness) of any other Person for which Buyer could become liable or obligated.
(ff) Cure: For all purposes under this Agreement, the existence or occurrence of any events or circumstances that constitute or cause a breach of a representation or warranty of Seller made in this Agreement on the date such representation or warranty is made shall be deemed not to constitute a breach of such representation or warranty if such event or circumstance is cured in all material respects, and said representation or warranty shall be true and correct in all material respects, on or prior to the Closing Date.
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(a) Organization of Buyer: Buyer is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware, and has all requisite limited liability company power and authority to own, lease and operate its properties and to carry on its business as now conducted. Buyer is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the property owned, leased or operated by it makes such qualification or licensing necessary, except in any jurisdiction where the failure to be so duly qualified or licensed or in good standing would not reasonably be expected to have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement.
(b) Authorization of Transaction: Buyer has full limited liability company power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder. Without limiting the generality of the foregoing, the execution, delivery and performance of this Agreement by Buyer has been duly and validly authorized by all necessary action on the part of Buyer in accordance with applicable law including the Delaware Limited Liability Company Act and the provisions of the certificate of formation and operating agreement of Buyer. This Agreement and the other Transaction Documents to which it is a party constitutes the valid and legally binding obligation of Buyer, enforceable in accordance with their respective terms and conditions, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and to general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law).
(c) Noncontravention: Subject to compliance with the HSR Act, neither the execution and the delivery of this Agreement, the other Transaction Documents or the other documents contemplated hereby and thereby, nor the consummation of the transactions contemplated hereby and thereby will (i) violate any Law or Order of any Governmental Body or court to which Buyer is subject or any provision of its certificate of formation or operating agreement or (ii) 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 Contract to which Buyer is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest upon any of its assets). Buyer does not need to give any notice to, make any filing with or obtain any authorization, consent or approval of any Governmental Body or other Person in order for the Parties to consummate the transactions contemplated by this Agreement (including the execution, delivery and performance of the assignments and assumptions referred to in Section 2 of this Agreement), except for such notices, filings, authorizations, consents or approvals as have been duly made or received, as the case may be.
(d) Brokers' Fees: Buyer has no liability or obligation to pay any fees or commissions or other compensation to any broker, finder or agent with respect to the transactions contemplated by this Agreement for which Seller could become liable or obligated.
(e) Litigation: Buyer is not (i) subject to any outstanding Order or (ii) a party or, to the Knowledge of the directors or officers of Buyer, threatened to be made a party to any Claim of, in or before any Governmental Body or before any arbitrator, which could reasonably be expected to have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement.
(f) Disclosure: The representations and warranties of Buyer contained in this Agreement do not (i) contain any untrue statement of a material fact or (ii) omit to state any material fact necessary in order to make the statements and information contained in this Agreement not misleading.
(g) Cure: For all purposes under this Agreement, the existence or occurrence of any events or circumstances that constitute or cause a breach of a representation or warranty of Buyer made in this Agreement (including, without limitation, the Schedules attached hereto) on the date such representation or warranty is made shall be deemed not to constitute a breach of such representation or warranty if such event or circumstance is cured in all material respects, and said representation or warranty shall be true and correct in all material respects, on or prior to the Closing Date.
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(a) Further Assurances: In the event that at any time after the Closing any further action is necessary to carry out the purposes of this Agreement or the other Transaction Documents, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefore under this Section 5).
(b) Confidentiality: Each Party will and will cause their respective Affiliates, directors, officers and employees to, for a period of two years, treat and hold confidential all of the Confidential Information and all terms of the transactions contemplated by the Transaction Documents, refrain from using any of the Confidential Information or any transactional terms except in connection with this Agreement (or as required to be disclosed to taxing authorities in connection with the payment of Taxes) and shall deliver promptly to the other Parties to this Agreement or destroy, at the request and option of such other Parties, all tangible embodiments (and all copies) of the Confidential Information which are in its possession; provided, however, that the foregoing shall not prevent any Person who is an employee of Buyer from after the Closing to utilize any Confidential Information as necessary in connection with the exercise of his or her duties on behalf of Buyer. In the event that any of the Parties or their respective directors, officers or employees is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand or similar process) to disclose any Confidential Information or any terms of the transactions contemplated by the Transaction Documents, then such Party will notify the other Parties promptly of the request or requirement so that the other Parties may seek an appropriate protective order or waive compliance with the provisions of this Section 5(b). If, in the absence of a protective order or the receipt of a waiver hereunder, such Party or its director, officer or employee is, on the advice of counsel, compelled to disclose any Confidential Information or any terms of the transactions contemplated by the Transaction Documents to any tribunal or else stand liable for contempt, such Party or director, officer or employee may disclose such Confidential Information or such transaction terms to the tribunal; provided, however, that the disclosing Person shall use his or its reasonable best efforts to obtain, at the reasonable request of any other Party, an order or other assurance that confidential treatment will be accorded to such portion of the Confidential Information or transaction terms required to be disclosed as any other Party shall designate. If for any reason the transactions contemplated by this Agreement are not consummated, the Parties shall each return to any other Party all information received by it from such other Party and all copies thereof.
(c) Closing Date Financial Statements:
(i) Seller shall cause to be prepared and delivered to Buyer the Closing Date Balance Sheet of Seller. Seller shall use its commercially reasonable efforts to deliver such financial statements to Buyer within 60 days after the Closing Date, but in any event shall deliver such financial statements no later than 90 days after the Closing Date.
(ii) Seller shall cause to be prepared and delivered to Buyer the related unaudited statements of operations, stockholders' equity and cash flows of Seller for the period from December 30, 2012 through the Closing Date. Seller shall use its commercially reasonable efforts to deliver such financial statements to Buyer within 45 days after the Closing Date, but in any event shall deliver such financial statements no later than 60 days after the Closing Date.
(d) Indemnification Provisions for the Benefit of Buyer:
i) Breach of Representations, Warranties or Covenants: In the event that Seller breaches any of its representations, warranties (which representations and warranties shall survive for a period of twenty-four (24) months from and after the Closing Date except for the representations and warranties in Section 3(b) (captioned "Authorization of Transaction"), in Section 3(e) (captioned "Title to Assets"), and in Section 3(k) (captioned "Tax Matters"), which shall remain in full force and effect until the expiration of all applicable statutes of limitations) or covenants contained in this Agreement and a Buyer Indemnified Party (as hereinafter defined) makes a written claim for indemnification against Seller then, Seller agrees jointly and severally to indemnify Buyer, its members, Affiliates and agents and their respective officers, directors and employees (collectively, the "Buyer Indemnified Parties"; each a "Buyer Indemnified Party") from and against the entirety of Adverse Consequences (subject to the limitations in Section 5(d)(iii) below) any Buyer Indemnified Party may suffer through and after the date of the claim for indemnification, resulting from, arising out of, relating to, in the nature of, or caused by such breach.
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(A) any Liability or obligation of Seller or the Business which is not an Assumed Liability (including any liability of Seller for Taxes that becomes a liability of Buyer (i) under any Tax or bulk transfer law of any jurisdictions, (ii) under any common law doctrine of de facto merger or successor liability or otherwise by operation of law or (iii) as a result of the consummation of the transactions contemplated hereby); provided, however, that, notwithstanding anything to the contrary herein, the indemnification obligations in this Paragraph (A) for any Liability or obligation (including for Taxes) which is not an Assumed Liability shall survive the Closing (even if Buyer knew or had reason to know of such Liability or obligation) and continue in full force and effect until the expiration of all applicable statutes of limitation; or
(B) the claims of any broker or finder engaged by or on behalf of Seller.
(e) Indemnification Provisions for the Benefit of Seller:
(i) Breach of Representations, Warranties or Covenants. In the event Buyer breaches any of its representations, warranties (which representations and warranties shall survive for a period of twenty-four (24) months from and after the Closing Date except for the representations and warranties in Section 4(b) (captioned "Authorization of Transaction"), which shall remain in full force and effect until the expiration of all this Agreement and a Seller Indemnified Party (as hereinafter defined) makes a written claim for indemnification against Buyer, then Buyer agrees to indemnify each of Seller, Parent and their respective shareholders, Affiliates and agents and their respective officers, directors and employees, (collectively, the "Seller Indemnified Parties"; each a "Seller Indemnified Party") from and against the entirety of the Adverse Consequences any Seller Indemnified Party may suffer through and after the date of the claim for indemnification resulting from, arising out of, relating to, in the nature of, or caused by such breach.
(ii) Assumed Liabilities; Brokers. Buyer agrees to indemnify the Seller Indemnified Parties from and against the entirety of any Adverse Consequences any Seller Indemnified Party may suffer through and after the date of the claim for indemnification resulting from, arising out of, relating to, in the nature of, or caused by:
(A) any Assumed Liability (provided, however, that notwithstanding anything to the contrary herein, the indemnification obligations in this Paragraph (A) for any Assumed Liability shall survive the Closing and continue in full force and effect until the expiration of all applicable statutes of limitation); or
(B) the claims of any broker or finder engaged by or on behalf of Buyer.
(f) Indemnification Matters Involving Third Parties:
(i) If any third party shall notify any Party (the "Indemnified Party") with respect to any matter (a "Third-Party Claim") which may give rise to a claim for indemnification against any other Party (the "Indemnifying Party") under this Section 5 then the Indemnified Party shall promptly notify each Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) Indemnifying Party is prejudiced thereby. In determining the amount of Adverse Consequences for purposes of Sections 5(d), (e) and (f) hereof, the Parties shall make appropriate adjustments for tax effects and insurance coverage and take into account the time cost of money (using the Applicable Rate as the discount rate).
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(ii) Any Indemnifying Party will have the right to assume the defense of the Third-Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party at any time within 20 days after the Indemnified Party has given notice of the Third-Party Claim; provided, however, that the Indemnifying Party must conduct the defense of the Third-Party Claim actively and diligently thereafter in order to preserve its rights in this regard; and, provided, further, that the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third-Party Claim; provided, that, if the named parties to any such Third-Party Claim (including any impleaded parties) include an Indemnified Party and the Indemnifying Party or one or more other Indemnified Parties and such Indemnified Party shall have been advised by its counsel in writing that there is a conflict of interest between such Indemnified Party and the Indemnifying Party or any such other Indemnified Party in the conduct of the defense thereof, then in any such case the reasonable fees and expenses of such separate counsel shall be borne by the Indemnifying Party. In the event that the Indemnifying Party fails to assume the defense of a Third-Party Claim in the manner provided above in this Paragraph (ii) or fails to conduct the defense of a Third-Party Claim actively and diligently after such assumption, the Indemnified Party shall have the right to select counsel of its choice (and at its sole discretion) and the reasonable fees and expenses of such counsel shall be paid by the Indemnifying Party.
(iii) So long as the Indemnifying Party has assumed and is conducting the defense of the Third-Party Claim in accordance with paragraph (ii) above,
(A) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnified Party (not to be withheld unreasonably) unless the judgment or proposed settlement involves only the payment of money damages by one or more of the Indemnifying Parties and does not impose an injunction or other equitable relief upon the Indemnified Party and
(B) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnifying Party (not to be withheld unreasonably).
(iv) In the event none of the Indemnifying Parties assumes and conducts the defense of the Third-Party Claim in accordance with Paragraph (ii) above,
(A) the Indemnified Party may defend against and consent to the entry of any judgment, or enter into any settlement with respect to, the Third-Party Claim in any manner it reasonably may deem appropriate (although the Indemnified Party shall use reasonable efforts to consult with, and obtain prior written consent from, any Indemnifying Party in connection therewith, which consent shall not be unreasonably withheld or delayed) and
(B) the Indemnifying Parties will remain responsible for any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by, the Third-Party Claim to the fullest extent provided in this Section 5(f).
(g) Set-Off and Recoupment. Intentionally Omitted:
(h) Other Indemnification Provisions: Except for a claim which resulted from intentional fraud on the part of any Party, the foregoing indemnification provisions shall be the exclusive remedy any Party may have for breach of representation, warranty or covenant. Parent hereby agrees that it will not make any claim for indemnification (whether such indemnification is available by statute, charter document, bylaw, agreement or otherwise) against any Buyer Indemnified Party as successor in interest to the assets of Seller solely by reason of the fact that it was a director, officer, employee or agent of Seller or was serving at the request of Seller as a partner, trustee, director, officer, employee or agent of another entity (whether such claim is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses or otherwise) with respect to any action, suit, proceeding, complaint, claim or demand brought by Buyer or any other Person against Parent (whether such action, suit, proceeding, complaint, claim or demand is pursuant to this Agreement, applicable law or otherwise). The immediately preceding sentence is not intended to foreclose the rights of Parent to seek indemnification from Buyer pursuant to Section 5(e) of this Agreement.
(i) Fraud: In a claim for indemnity which is related to an Adverse Consequence which resulted from intentional fraud on the part of Seller or Buyer, Seller or Buyer responsible for such intentional fraud will not have the benefit of the limitation of Section 5(d)(iii) or 5(e)(iii), as the case may be, or the 24 months survival limitation period.
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(j) Records: Buyer shall preserve and retain the corporate, accounting, legal and other records of Seller and the Business that shall come into Buyer's possession as a result of the transactions contemplated hereby for a period of not less than seven years from the Closing Date and give reasonable access to Seller, Parent and their auditors, counsel and other authorized representatives for the purpose of preparing or defending Tax Returns or for other reasonable business purposes.
(k) Third Party Consents: Each Party shall use its reasonable efforts to procure all consents necessary to permit it to consummate the transactions contemplated by this Agreement. If the Parties have not obtained a consent or approval necessary for the assignment of any Contract, arrangement or right included in the Acquired Assets or the assumption of any of the Assumed Liabilities prior to the Closing Date and any condition precedent to the Closing relating thereto shall have been waived by Buyer and/or Seller as applicable, then such failure shall not constitute a breach of any representation or warranty of Seller and Buyer shall attempt, with the reasonable assistance of Seller , when requested by Buyer, to obtain such consents and approvals promptly after the Closing Date. Within five (5) Business Days after the date hereof, the Parties shall mutually agree in good faith which consents set forth on Schedule 3(c) are deemed to be Required Consents.
(l) Non-Compete: Seller agrees that it will not:
(A) for a period of two (2) years from and after the Closing Date (the "Non-Compete Period"), directly or indirectly (whether as owner, consultant, employee, partner, venturer, agent through stock ownership, investment of capital, lending of money or property, or otherwise) anywhere in the world in the marketing, sale and distribution to consumers discounted luxury goods via a membership only website sold via flash sales (as that term is currently understood in the retail website business).
(B) during the Non-Compete Period, employ or retain, or have or cause any other Person or entity to employ or retain or otherwise cause to terminate his or her employment with Buyer, any key employee who was employed or retained by Buyer or Seller at any time during the three-month period prior to the Closing Date and which key employees shall be identified by Buyer to Seller in writing any time prior to the Closing (the "Key Employees");
(C) for a period of three (3) months following the Closing, employ or retain, or have or cause any other Person or entity to employ or retain or otherwise cause to terminate his or her employment with Buyer any other employee who was employed or retained by Buyer at the Closing Date; provided, however, that Seller shall not in any event during the Non-Compete Period solicit the employment of such employee or cause such employees to leave the employment with Buyer, and, provided, further, that Seller shall not be restricted from employing any employee (other than a Key Employee) to whom an offer of employment has not been made by Buyer as of the Closing; or
(D) during the Non-Compete Period, solicit, interfere with, or endeavor to entice away from Buyer, any principal, salesperson, supplier or other Person with whom Buyer or Seller, during the 12-month period prior to the Closing Date or during the Non-Compete Period, has conducted business or has had an introduction, lead, relationship, understanding or arrangement.
Notwithstanding anything set forth in this Section 5(l) to the contrary, no owner of stock of GDI or owner of less than five percent (5%) of the outstanding stock of any publicly traded corporation shall be deemed, solely by reason thereof, to engage in any of its businesses.
(m) Risk of Loss; Condemnation:
(i) Seller will bear the risk of any loss or damage to the Acquired Assets resulting from fire, theft or other casualty (except reasonable wear and tear) at all times prior to the Closing. If any such loss or damage, in the reasonable opinion of Buyer, is so substantial as to (I) prevent normal operation of any material portion of the Business or the replacement or restoration of the lost or damaged property within 20 days after the occurrence of the event resulting in such loss or damage, or (II) result in a Material Adverse Effect, Seller will (a) immediately notify Buyer of that fact and (b) Buyer may elect to terminate this Agreement. If Buyer elects so to terminate this Agreement, all Parties will be discharged of any and all obligations hereunder (other than any obligations arising from a breach by any Party of this Agreement). If the Parties mutually elect to consummate the transactions contemplated by this Agreement notwithstanding such loss or damage and do so, all insurance proceeds payable as a result of the occurrence of the event resulting in such loss or damage will be delivered promptly by Seller to Buyer, or the rights to such proceeds will be assigned by Seller to Buyer if not yet paid over to Seller, and Seller will pay to Buyer an amount equal to the difference between the amount of such insurance proceeds and the full replacement cost of the damaged or lost assets as reasonably agreed to by the Parties.
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(ii) If, prior to the Closing, all or any part of or interest in the Acquired Assets is taken or condemned as a result of the exercise of the power of eminent domain, or if a Governmental Body having such power informs Seller or Buyer that it intends to condemn all or any part of or interest in the Acquired Assets, and such taking is, in the reasonable opinion of Buyer, so substantial as to prevent normal operation of any material portion of the Business (such event being called, in either case, a "Taking"), then Buyer may terminate this Agreement. If Buyer elects to consummate the transactions contemplated by this Agreement, notwithstanding such Taking, then (I) Buyer will have the sole right, in the name of Seller, if Buyer so elects, to negotiate for, claim, contest and receive all damages with respect to the Taking; (II) Seller will be relieved of its obligation to convey to Buyer the assets or interests that are the subject of the Taking; (III) at the Closing, Seller will assign to Buyer all of Seller's rights to all damages payable with respect to such Taking and will pay to Buyer all damages previously paid to Seller with respect to the Taking; and (IV) following the Closing, Seller will give Buyer such further assurances of such rights and assignments with respect to the taking as Buyer may from time to time reasonably request.
(n) Tax Return Filing and Payment:
(i) Seller shall prepare and file any Tax Return with appropriate Federal, state and local government agencies, required to be filed with respect to Taxes (excluding income taxes), a portion of which relates to the assets or the operations of the Business for periods beginning prior to the Closing Date for which a return or payment is due after the Closing Date (collectively, "Straddle Non-Income Tax Returns"). Buyer shall prepare and file all other Tax Returns and pay all other Taxes required to be filed or paid after the Closing Date which solely relate to periods after the Closing Date.
(ii) For each Straddle Non-Income Tax Return, Seller shall notify Buyer, in good faith, of its obligation for the Taxes due (or portion thereof, in the case of property Taxes) in accordance with the terms of this Agreement, within 30 days of the due date of such Tax Return. Buyer shall remit such amounts to Seller within 15 days of such notice. Any interest, penalties or additional amounts imposed by the relevant taxing authority caused by Buyer's failure to so remit such amounts shall be an obligation of Buyer.
(iii) The Parties shall provide each other at no additional charge with such assistance as may reasonably be requested in connection with the preparation of any Tax Return relating to the Acquired Assets.
(iv) Attached hereto as Schedule 5(n) is a schedule of all Tax Returns currently being filed by Seller and their Affiliates relating to the Acquired Assets and the Business. Seller shall not be liable for any penalties imposed on Buyer as a result of Buyer's reliance on such schedule.
(o) General: Each of the Parties will use its reasonable best efforts to take all action and to do all things necessary in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Section 6 below).
(p) Operation of Business: Prior to the Closing, Seller will not engage in any practice, take any action, or enter into any transaction outside the Ordinary Course of Business. Without limiting the generality of the foregoing, Seller will not engage in any practice, take any action, or enter into any transaction of the sort described in Section 3(g) above.
(q) Preservation of Business: Prior to the Closing, Seller will keep its business and properties substantially intact, including its present operations, physical facilities, working conditions, and relationships with lessors, licensors, suppliers, customers, and employees.
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(r) Full Access: Prior to the Closing, upon request of Buyer, Seller will permit representatives of Buyer to have full access at all reasonable times, and in a manner so as not to interfere with the normal business operations of Seller, to all premises, properties, personnel, books, records (including tax records), contracts, and documents of or pertaining to Seller.
(s) No Solicitation. Until February 24, 2014 Seller shall not (i) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of any capital stock or other voting securities, or any substantial portion of the assets, of Seller (including any acquisition structured as a merger, consolidation, or share exchange) or (ii) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing.
(t) Material Adverse Change:
(i) Subject to the provisions of Section 3(ff), Seller shall give prompt written notice to Buyer of any material adverse development of which the officers or directors of either Seller have Knowledge after reasonable investigation and which Seller believe causes a breach of any of their representations and warranties in Section 3 above. No disclosure by Seller pursuant to this Section 5(t), however, shall be deemed to amend or supplement Schedules to this Agreement or to prevent or cure any misrepresentation, breach of warranty, or breach of covenant.
(ii) Subject to the provision of Section 4(g), Buyer shall give prompt written notice to Seller of any material adverse development of which the officers or directors of Buyer have Knowledge after reasonable investigation and which it believes causes a breach of any of its representations and warranties in Section 4 above. No disclosure by Buyer pursuant to this Section 5(t), however, shall be deemed to amend or supplement Schedules to this Agreement or to prevent or cure any misrepresentation, breach of warranty, or breach of covenant.
(i) Buyer agrees that it will provide Seller with notice of which employees of Seller that Buyer intends to hire at least five (5) Business Days after the Closing Date. With respect to the employees of Seller hired by Buyer ("Hired Employees"), Buyer shall honor all accrued vacation not taken by such employees for the calendar year in which the Closing occurs to the extent such accrued vacation does not exceed that awarded to Buyer's other employees pursuant to Buyer's standard vacation accrual and year-end carryover policy.
(ii) Buyer shall offer health plan coverage to all of the Hired Employees who become employed by Buyer as of the Closing Date on terms and conditions generally applicable to all of Buyer's employees. For purposes of providing such coverage, Buyer shall waive all preexisting condition limitations for all such Hired Employees covered by the Seller's health care plan as of the Closing Date and shall provide such health care coverage effective as of the Closing Date without the application of any eligibility period for coverage. In addition, Buyer shall credit all employee payments toward deductible and co-payment obligation limits under Seller's health care plans for the plan year which includes the Closing Date as if such payments had been made for similar purposes under Buyer's health care plans during the plan year which includes the Closing Date, with respect to the Hired Employees who become employed by Buyer as of the Closing Date.
(iii) For each Hired Employee who Buyer hires on the Closing Date, Buyer shall give past service credit for all crediting purposes under each of its employee benefit plans that, on or after the Closing Date, provides coverage to the Hired Employees employed by Buyer as of the Closing Date to the same extent such employment service was credited for similar purposes under Seller's employee benefit plans prior to the Closing Date.
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(iv) In accordance with the provisions of Internal Revenue Service Revenue Procedure 96-60, Buyer shall assume the obligation to make all Form W-2 income tax report filings for the calendar year in which the Closing Date occurs, and Seller shall be relieved from making any such filings with respect to the Hired Employees that are employed by Buyer as of the Closing Date. Seller shall provide to Buyer all information, including withholding certificates, as may be reasonably requested by Buyer to accomplish Buyer's obligations under this Agreement.
(v) Buyer shall offer employment to a sufficient number of the employees employed by Seller as of the Closing Date to ensure that fifty or more employees of Seller do not experience "employment loss," as that term is defined in the Worker Adjustment Retraining Notification Act, Public Law 100-379 (August 4, 1988) ("WARN Act") during the ninety (90) day period prior to and including the Closing Date. Buyer shall continue to employ such employees who accept such offers for a period of at least ninety (90) days after the Closing Date, except for such employees who voluntarily terminate employment, retire or are discharged for cause. Buyer shall be solely responsible for and shall indemnify and hold Seller harmless from any liability arising under the WARN Act after the Closing Date, including without limitation any liability arising out of Buyer's failure to extend such offers of employment to such employees of Seller.
(aa) Unclaimed Property Tax Returns: Included in the Assumed Liabilities set forth on the Closing Date Net Tangible Assets Statement will be an amount relating to refund checks that have been issued to customers of the Acquired Business but which have not as yet been cashed as of the Closing. With respect to such refund amounts for which a Tax is due and payable as of the Closing Date under state unclaimed property laws or similar escheat laws, Seller covenant and agree to file all required Tax Returns with respect thereto and to pay all Taxes reflected thereon as soon as reasonably practicable following the Closing. Buyer shall reimburse Seller for the amount of such Taxes actually paid to the applicable Governmental Body within 30 days of receipt by Buyer of an invoice therefore from Seller, together with a copy of the applicable Tax Returns and such other supporting materials as Buyer may reasonably request.
SECTION 6. CONDITIONS TO OBLIGATION TO CLOSE.
(i) the representations and warranties set forth in Section 3 above shall be true and correct in all material respects at and as of the Closing Date;
(ii) Seller shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;
(iii) Seller shall have procured all of the Required Consents specified in Schedule 3(c) at or prior to the Closing;
(iv) no action, suit or proceeding is pending before any Governmental Body or arbitrator wherein an unfavorable Order would:
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(A) prevent consummation of any of the transactions contemplated by this Agreement or the other Transaction Documents,
(B) cause any of the transactions contemplated by this Agreement or the other Transaction Documents to be rescinded following consummation or
(C) affect adversely the Acquired Assets or their value or the right of Buyer to own the Acquired Assets and to operate the Acquired Business (and no such Order shall be in effect);
(v) all material registrations, filings, applications, notices, consents, approvals, orders, qualifications and waivers required in respect of the transactions contemplated hereby shall have been filed, made or obtained, and all waiting periods applicable under the HSR Act shall have expired or been terminated;
(vi) Seller shall have delivered to Buyer a certificate signed by a Vice President of Seller, without personal liability, to the effect that each of the conditions specified above in Section 6(a)(i) and (ii) is satisfied;
vii) Buyer shall have received from or on behalf of Seller delivery of all the Closing Documents listed in Section 7(a) below;
(viii) all actions to be taken by Seller in connection with consummation of the transactions contemplated hereby and by the other Transaction Documents and all certificates, opinions, instruments and other documents required to effect the transactions contemplated hereby and thereby will be reasonably satisfactory in form and substance to Buyer;
(ix) Seller shall have delivered the audited balance sheet and related statements of operations, stockholder's equity and cash flows of Seller as of and for the fiscal year ended December 30, 2012 prepared in accordance with GAAP and which conform with the provisions of Regulation S-X of the Securities Act, which have been previously delivered to Buyer in draft form and with respect to which Buyer acknowledges that none of the conditions specified in the definition of "significant subsidiary" in Rule 1-02(w) of Regulation S-X exceeds 40% when compared to the consolidated financial statements of Buyer. The reasonable cost of preparing the aforesaid financial statements shall be borne by Seller. Alternatively, should such statements not be available prior to the Closing, Seller shall have delivered prior to the Closing a letter from the Seller's Accountant confirming that they can provide such audited financial statements. In addition, Seller shall have delivered a letter, in substantially the form set forth in Exhibit G, from the Seller's Accountant, containing an undertaking to consent in the future to the use by Buyer or its Affiliates, in documents filed pursuant to the Securities Act or the Securities Exchange Act, of the above required financial statements of Seller audited by such auditors and the auditor's reports with respect to such financial statements;
(x) The Estimated Closing Date Net Tangible Assets (as defined below) of Seller shall be not less than amount shown on the balance sheet. The amount of the Estimated Closing Date Net Tangible Assets shall be based on a statement of the Net Tangible Assets of Seller delivered by Seller no less than 5 days prior to the Closing Date (which was prepared in good faith by Seller in accordance with GAAP and accepted by Buyer, the "Estimated Closing Date Net Tangible Assets Statement"), as estimated for and as of the Closing Date (the "Estimated Closing Date Net Tangible Assets");
(xi) Seller shall deliver at the Closing a complete, accurate and current, as of a date within two weeks prior to Closing, "marketing extract" in electronic form useable by Buyer, extracted from Seller's database.
(xi). Buyer may waive any condition specified in this Section 6(a) if it executes a writing so stating at the Closing, it being understood that if Buyer elects to waive in writing any of such conditions and proceed with the Closing, no claim or right to be indemnified for failure to satisfy such condition shall be available to Buyer.
(i) the representations and warranties set forth in Section 4 above shall be true and correct in all material respects at and as of the Closing Date;
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(ii) Buyer shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;
(iii) no action, suit or proceeding is pending before any Governmental Body or arbitrator wherein an unfavorable Order would:
(A) prevent consummation of any of the transactions contemplated by this Agreement or the other Transaction Documents or
(B) cause any of the transactions contemplated by this Agreement or the other Transaction Documents to be rescinded following consummation or
(C) affect adversely the ability of Buyer to assume the Assumed Liabilities (and no such Order shall be in effect);
(v) all material registrations, filings, applications, notices, consents, approvals, orders, qualifications and waivers required in respect of the transactions contemplated hereby shall have been filed, made or obtained, and all waiting periods applicable under the HSR Act shall have expired or been terminated;
vi) Buyer shall have delivered to Seller a certificate signed by the Chief Executive Officer of Buyer, without personal liability, to the effect that each of the conditions specified above in Section 6(b)(i) and (ii) is satisfied;
(vii) Buyer shall have made available to Seller such information concerning Buyer as may be reasonably necessary to enable Seller to be reasonably satisfied of Buyer's ability to fulfill its duties and obligations pursuant to the NQSO Agreement;
(viii) Seller shall have received from or on behalf of Buyer all of the Closing Documents listed in Section 7(b) below;
(ix) all actions to
be taken by Buyer in connection with consummation of the transactions contemplated hereby and by the other Transaction Documents
and all certificates, opinions, instruments and other documents required to effect the transactions contemplated hereby and thereby
will be reasonably
satisfactory in form and substance to Seller;
(x) Seller shall have received the consent of the landlord to enter into the Sublease.
Seller may waive any condition specified in this Section 6(b) if it executes a writing so stating at the Closing, it being understood that if Seller elects to waive in writing any of such conditions and proceeds with the Closing, no claim or right to be indemnified for failure to satisfy such condition shall be available to Seller.
(i) the Xxxx of Sale;
(ii) the Assignment Documents;
(iii) all other documents necessary to convey good and valid title to the Acquired Assets;
(iv) Intentionally Omitted:
(v) Intentionally Omitted:
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(vi) a certificate dated the Closing Date, of the Secretary of Seller:
(A) attaching copies, certified by such officer, without personal liability, as true and complete, of the Bylaws of Seller , as amended to the Closing Date;
(B) attaching resolutions of the Board of Directors and the stockholders of each of Seller , if required, in connection with the authorization and approval of the execution, delivery and performance by each of Seller of this Agreement and the Transaction Documents to which it is a party;
(C) setting forth the incumbency of the officer or officers of each of Seller who have executed and delivered this Agreement and each other Transaction Document to which it is a party, including therein a signature specimen of each such officer or officers;
(D) attaching copies, certified by the Secretary of State of the State of Delaware, of each of Seller's Certificate of Incorporation as amended to the Closing Date; and
(E) certifying without personal liability that no action, suit or proceeding is pending before any Governmental Body or arbitrator wherein an unfavorable Order would (1) prevent consummation of any of the transactions contemplated by this Agreement or the other Transaction Documents, (2) cause any of the transactions contemplated by this Agreement or the other Transaction Documents to be rescinded following consummation or (3) affect adversely the Acquired Assets or their value or the right of Buyer to own the Acquired Assets and to operate the Acquired Business (and that no such Order is in effect);
(vii) Intentionally Omitted:
(viii) Intentionally Omitted:;
(ix) Intentionally Omitted:;
(x) if any party has a security interest in any of the Acquired Assets then Seller shall provide UCC-3 financing statements terminating UCC-1 financing statements filed wherever and whenever, including but not limited to the New York and Delaware Secretary of State, releasing all Security Interests held by any Person in the Acquired Assets, including, without limitation, those security interests evidenced by the UCC-1 financing statements set forth on Schedule 7(a)(x);
(xi) evidence reasonably acceptable to Buyer that Seller has taken all steps necessary to change, effective immediately following the Closing: its corporate name to any name other than "LuxeYard" or any variant or abbreviation thereof;
(xii) an assignment to Buyer of Seller's merchant numbers used for credit card purchases, to the extent transferable;
(xiii) the Sublease (including an estoppel certificate from the lessor);
(xiv) letters from Seller’s phone carriers, consenting to the assignment and transfer to Buyer of all phone numbers including any toll-free 800 and 888- prefix phone numbers used by Seller in the Business if such numbers exist; and
(xv) the Lease between Buyer and Seller.
(i) the Xxxx of Sale executed by Buyer;
(ii) the Assignment Documents;
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(iii) Intentionally Omitted;
(iv) Intentionally Omitted:
(v) Intentionally Omitted:
(vi) Intentionally Omitted:
(vii) Intentionally Omitted:
(viii) all material authorizations, consents and approvals of governments and governmental agencies set forth in Schedule 4(c) hereof;
(ix) Intentionally Omitted:
(x) Intentionally Omitted:
(xi) Intentionally Omitted:
(xii) Intentionally Omitted:
(xiii) Intentionally Omitted:
(a) Method of Termination. This Agreement may be terminated or abandoned only as follows:
(i) At any time prior to the Closing by the mutual consent of the Parties hereto;
(ii) By Buyer after February 22, 2012 if any of the conditions set forth in Section 6(a) hereof to which the obligations of Buyer are subject have not been fulfilled or waived in writing, unless such fulfillment has been frustrated or made impossible by any act or failure to act of Buyer;
(iii) By Seller after February 22, 2012, if any of the conditions set forth in Section 6(b) hereof to which the obligations of Seller are subject have not been fulfilled or waived in writing, unless such fulfillment has been frustrated or made impossible by any act or failure to act of Seller ; or
(iv) By any Party pursuant to the terms of Sections 5(m) ("Risk of Loss; Condemnation") and 10(c) ("HSR and Other Filings").
(i) In the event of a termination of this Agreement pursuant to Section 8(a)(i) or 8(a)(iv) hereof, each Party shall pay the costs and expenses incurred by it in connection with this Agreement, and no Party (or any of its officers, directors, members, employees, agents, representatives or stockholders) shall be liable to any other Party for any cost, expense, damage or loss of anticipated profits hereunder.
(ii) In the event of a termination of this Agreement pursuant to Section 8(a)(ii) hereof and either Seller is in breach of any material provision of this Agreement, then Buyer shall have the right to seek all remedies available to it as provided under this Agreement and at law.
(iii) In the event of termination of this Agreement pursuant to Section 8(a)(iii) hereof and Buyer is in breach of any material provision of this Agreement, then Seller shall have the right to seek all remedies available to them as provided under this Agreement and at law.
(iv) In the event of termination of this Agreement for any reason, the confidentiality provisions contained in Section 5(b) hereof shall survive.
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SECTION 9. ARBITRATION OF DISPUTES.
(c) Governing Law; Written Decision: Any arbitration hereunder or under any Transaction Document, shall be governed by the laws of the State of Delaware, which laws the Arbitrator shall apply in rendering his or her decision. The Arbitrator shall issue a written decision, setting forth findings of fact and conclusions of law, within 60 days after he or she shall have been selected. The Arbitrator shall have no authority to award punitive or other exemplary damages.
(d) Procedures; Evidence; Experts:
(i) Any arbitration instituted by a Party shall be held in Los Angeles, CA in accordance with and under the then-current provisions of the rules of the American Arbitration Association, except as otherwise provided herein.
(ii) On application to the Arbitrator, any Party shall have rights to discovery to the same extent as would be provided under the Federal Rules of Civil Procedure and the Federal Rules of Evidence shall apply to any Arbitration under this Agreement; provided, however, that the Arbitrator shall limit any discovery or evidence such that his or her decision shall be rendered within the period referred to in Section 9(c).
(iii) The Arbitrator may, at his or her discretion and at the expense of the Party(ies) who will bear the cost of the Arbitration, employ experts to assist him or her in his or her determinations.
(f) Consent to Jurisdiction: Any judgment upon any award rendered by the Arbitrator may be entered in and enforced by any court of competent jurisdiction. The Parties expressly consent to the jurisdiction of the Federal courts in Central District of California to enforce any award of the Arbitrator or to render any provisional or injunctive relief in connection with or in aid of the arbitration. The Parties expressly consent to the personal and subject matter jurisdiction of the Arbitrator to arbitrate any and all matters to be submitted to arbitration hereunder. None of the Parties hereto shall challenge any arbitration hereunder on the grounds that any Person necessary to such arbitration (including, without limitation, any Party hereto) shall have been absent from such arbitration for any reason, including, without limitation, that such Person shall have been the subject of any bankruptcy, reorganization or insolvency proceeding.
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(k) Interest: Any amount payable by one Party to another under this Section 9, shall bear interest at the rate of 12% per annum from the date due until paid.
(a) Lockup of the Shares. Seller agrees to be bound to the terms of the lock-up agreement (the “Lock-up Agreement”) as set forth in Exhibit B.
(b) Press Releases and Public Announcements: Upon the signing of this Agreement or within a reasonable time thereafter, Buyer shall, and Seller may, issue a press release relating to the purchase and sale of the assets of Seller. The text of such press release shall be subject to the reasonable approval, which will not be unreasonably withheld or delayed, of Seller or Buyer, as the case may be. No Party shall disclose to any third party, other than its legal and financial advisors and others who need to know in order to consummate this Agreement, the terms of this Agreement or the other Transaction Documents, without the prior written approval of the other Parties; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly-traded securities (in which case the disclosing Party will use its reasonable best efforts to advise the other Parties prior to making the disclosure).
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If to Seller :
Xxxxxxxxx Xxxx |
00-00 00xx Xxxxxx |
Xxxxxxx, Xxx Xxxx, 00000 |
If to Buyer:
LY Retail, LLC
0000 Xxxxxx Xxxx
Xxx Xxxxxxx, Xx. 00000
Attention: Xxxxxx Xxxxxxx
Facsimile: 000-000-0000
e-mail: xxxxxxxx@xxxxxxxx.xxx
with a copy in each case (which shall not constitute notice) to:
Xxxxxx Xxxxxxx
0000 Xxxxxx Xxxx
Xxx Xxxxxxx, Xx. 00000
Attention: Xxxxxx Xxxxxxx
Facsimile: 000-000-0000
e-mail: xxxxxxxx@xxxxxxxx.xxx
Any Party may send any notice, request, demand, claim or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.
(j) Governing Law: This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
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(o Incorporation of Appendices, Exhibits and Schedules: The Exhibits, Appendices and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof.
LY Retail, LLC
By: | ||
Xxxxxx Xxxxxxx | ||
Its: | Chief Executive Officer |
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eOPULENCE LLC
By: |
Xxxxxxxxx Xxxx | ||
Its: | Chief Executive Officer |
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APPENDIX I
DEFINITIONS:
“Acquired Assets" means all of the Business, goodwill, assets, properties and rights of every nature, kind and description, whether tangible or intangible, real, personal or mixed, wherever located and whether or not carried or reflected on the books and records of Seller, which are (i) owned by Seller or (ii) in which Seller has any interest, or (iii) which are located on the premises of Seller and used exclusively by Seller in its Business as of the Closing Date, or which are otherwise used exclusively in, related exclusively to, or useful exclusively to, the Business, except for the Excluded Assets referred to below. The Acquired Assets shall include, but not be limited to, the following:
(a) all tangible personal property set forth on Schedule 1.1(a) (such as machinery, equipment, inventories of supplies, manufactured and purchased parts, goods in process and finished goods, furniture, automobiles, trucks, tractors, trailers, tools, jigs, dies and leasehold improvements);
(b) all Intellectual Property set forth on Schedule 1.1(b), goodwill associated therewith, licenses and sublicenses granted and obtained with respect thereto and rights thereunder, remedies against infringements thereof and rights to protection of interests therein under the laws of all jurisdictions, including, without limitation, the exclusive right to use the domain name "xXXXXXXXX.xxx," and the right to use in the Business the names (including derivatives and variations thereof) and associated logos, if any, and the Miscellaneous Design (collectively, the "Catalog Names");
(c) all agreements, contracts, indentures, mortgages, instruments, chattel paper, guaranties, other similar arrangements and rights thereunder, including, without limitation, the leases in respect of (i) the telephone and computer equipment (to the extent included in the Acquired Assets);
(d) all accounts, notes and other receivables;
(e)all claims, deposits, prepayments, refunds, causes of action, chooses in action, rights of recovery, rights of set off and rights of recoupment;
(f) all franchises, approvals, permits, licenses, orders, registrations, certificates, variances and similar rights obtained from governments and governmental agencies to the extent transferable;
(g) all books, records, ledgers, files, documents, correspondence, customer lists, prospect lists and other lists, plats, architectural plans, drawings and specifications, creative materials, advertising and promotional materials, studies, reports and other printed or written material (excluding any such item exclusively relating to an Excluded Asset, Excluded Contract or Excluded Liability);
(h) all cash;
(i) all prepaid expenses to the extent included in Closing Date Net Tangible Assets; provided that any prepaid expense that is included in the Closing Date Net Tangible Assets will be considered part of the Acquired Assets even if its value is zero;
(j) all data processing programs, computer printouts, data bases, hardware, merchant numbers used for credit card purchases (to the extent transferable) and related items owned by Seller or used exclusively in the conduct of the Business, including accounting, invoices, crediting and data processing losses and programs; and
(k) all rights, claims and causes of action held by or inuring to the benefit of Seller
"Acquired Business" means the businesses and operations acquired by Buyer pursuant to this Agreement.
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“actual attorneys' fees" or "attorneys' fees actually incurred" means the full and actual costs of any real services actually performed in connection with the matter for which such fees are sought, calculated on the basis of the usual fees charged by the attorneys performing such services and shall not be limited to "reasonable attorneys' fees" as that term may be defined in statutory or decisional authority.
"Adverse Consequences" means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities, obligations, taxes, liens, losses, expenses and fees, including court costs and reasonable attorneys' fees and expenses, whether resulting from the breach of a representation, warranty, covenant or otherwise.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act.
"Agreement" has the meaning set forth in the preface of this Agreement.
"Antitrust Division" has the meaning set forth in Section 10(c) of this Agreement.
"Applicable Rate" means the annualized interest rate as determined pursuant to Section 1274(d) of the Code.
"Arbitrator" has the meaning set forth in Section 9(a) of this Agreement.
"Assignment Documents" has the meaning set forth in Section 2(e) of this Agreement.
"Assumed Contracts" has the meaning set forth in the definition of the term "Acquired Assets."
"Assumed Liabilities" means those liabilities incurred by Seller but only to the extent that such Assumed Liabilities have been incurred in the Ordinary Course of Business and are within usual commercial terms. Specifically Buyer shall assume the cost for any leasehold interests. Notwithstanding the foregoing, the total amount of Seller’s Assumed Liabilities shall in no event whatsoever exceed Ten Thousand Dollars ($10,000.00). Any Assumed Liabilities in excess of Ten Thousand Dollars ($10,000.00) shall be the sole and exclusive obligation of Seller.
“Xxxx of Sale" has the meaning set forth in Section 2(e) of this Agreement.
“Business" means the businesses and operations of Seller as conducted now by Seller anywhere in the world.
"Business Day" means any day other than a Saturday, a Sunday or a day on which banking institutions in the United States of America are not open for business.
"Buyer" has the meaning set forth in the preface of this Agreement.
"Buyer Indemnified Parties" has the meaning set forth in Section 5(d)(i) of this Agreement.
"Buyer Indemnified Party" has the meaning set forth in Section 5(d)(i) of this Agreement.
"Catalog Names" has the meaning set forth in the definition of the term "Acquired Assets."
Claims" mean all actions, suits, notices, claims, demands, orders, Governmental Body-imposed or court-imposed requirements, proceedings, hearings and investigations.
"Closing" has the meaning set forth in Section 2(d) of this Agreement.
"Closing Date" has the meaning set forth in Section 2(d) of this Agreement.
"Closing Date Balance Sheet" has the meaning set forth in Section 2(f)(i) of this Agreement.
"Closing Date Net Tangible Assets" has the meaning set forth in Section 2(f)(i) of this Agreement.
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"Closing Date Net Tangible Assets Statement" has the meaning set forth in Section 2(f)(i) of this Agreement.
"Closing Stock Price" means the closing stock price of the Common Stock on the Business Day immediately prior to the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" has the meaning set forth in Section 2(c)(i) of this Agreement.
"Confidential Information" means any information concerning the businesses and affairs of Seller, Parent, Buyer, the Business or the Acquired Business that is not already generally available to the public and that is treated as confidential by the party who owns or created such information, other than (x) information that is required to be disclosed by applicable law or judicial order, (y) disclosures made by any Party to its directors, officers, employees, attorneys, accountants, members, lenders and accredited potential investors (excluding any potential investors that are competitors of the Business) and other agents that need the information in connection with the evaluation and consummation of the transactions contemplated herein, or (z) disclosures made by any Party as shall be reasonably necessary in connection with obtaining the consents and approvals set forth in Schedule 3(c) or Schedule- 4(c); provided, however, in connection with disclosure of Confidential Information under (x) and (z) hereof, the disclosing Party shall give the other Party hereto timely prior notice of the anticipated disclosure and the Parties shall cooperate in designing reasonable procedural and other safeguards to preserve, to the maximum extent possible, the confidentiality of such material.
"Contract" means any contract, agreement, indenture, note, bond, loan, guaranty, instrument, lease, conditional sale contract, mortgage, license, franchise, power of attorney, commitment or other binding arrangement, whether written or oral.
"Environmental, Health and Safety Laws" means the following as in effect as of the date hereof: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act of 1976 and the Occupational Safety and Health Act of 1970, each as amended, together with all other laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings and charges thereunder) of Federal, state, local and foreign governments (and all agencies thereof) concerning pollution or protection of the environment, public health and safety or employee health and safety, including laws relating to emissions, discharges, releases or threatened releases of pollutants, contaminants or chemical, industrial, hazardous or toxic materials or wastes into ambient air, surface water, ground water or lands or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants or chemical, industrial, hazardous or toxic materials or wastes.
"Escrow Agent" has the meaning set forth in the Escrow Agreement.
"Escrow Agreement" has the meaning set forth in Section 2(c)(i) of this Agreement.
"Escrow Shares" has the meaning set forth in Section 2(c)(i) of this Agreement.
"Estimated Closing Date Net Tangible Assets" has the meaning set forth in Section 6(a)(x) of this Agreement.
“Estimated Closing Date Net Tangible Assets Statement" has the meaning set forth in Section 6(a)(x) of this Agreement.
"Excluded Assets" has the meaning set forth in the definitions of the term "Acquired Assets."
"Excluded Contracts" means those Contracts of Seller other than Assumed Contracts, including those listed in Schedule 1.2.
"Excluded Liability" means any liability of Seller other than Assumed Liabilities.
"FTC" has the meaning set forth in Section 10(c) of this Agreement.
"GAAP" means United States generally accepted accounting principles as in effect from time to time.
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"GDI" has the meaning set forth in Section 2(c)(i) of this Agreement.
"GDI Agreement" means that certain Agreement of even date herewith among Seller, Parent and GDI.
"Governmental Body" means any government or any agency, subdivision or instrumentality of any government.
"Historical Financial Statements" has the meaning set forth in Section 3(f)(i) of this Agreement.
"Hired Employees" has the meaning set forth in Section 5(w)(i) of this Agreement.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
"Indemnified Party" has the meaning set forth in Section 5(f)(i) of this Agreement.
"Indemnifying Party" has the meaning set forth Section 5(f)(i) of this Agreement.
"Intellectual Property" means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto and all patents, patent applications and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, trade names and corporate names, together with all translations, adaptations, derivations and combinations thereof and including all goodwill associated therewith and all applications, registrations and renewals in connection therewith, (c) all copyrightable works, all copyrights and all applications, registrations and renewals in connection therewith, (d) all mask works and all applications, registrations and renewals in connection therewith, (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, housefile databases, mailing lists, customer and supplier lists, pricing and cost information and business and marketing plans and proposals), (f) all computer software (including all data and related documentation), (g) all other proprietary rights and (h) all copies and tangible embodiments thereof (in whatever form or medium).
"June 1998 Balance Sheet" has the meaning set forth in Section 3(f)(ii) of this Agreement.
"June 1998 Financial Statements" has the meaning set forth in Section 3(f)(ii) of this Agreement.
"Key Employees" has the meaning set forth in Section 5(l)(B) of this Agreement.
"Knowledge" means actual knowledge.
"Law" means any applicable law, statute, code, ordinance, regulation or other requirement of any Governmental Body.
"Lease" has the meaning set forth in Section 3(l)(i) of this Agreement.
"Liabilities" means any direct or indirect indebtedness, liability, claim, loss, damage, obligation or responsibility, known or unknown, fixed or unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise, whether or not of a kind required by GAAP to be set forth on a financial statement or in the notes thereto, including, without limitation, any Liabilities for Taxes.
"License Agreement" has the meaning set forth in Section 7(a)(vii) of this Agreement.
Mailing Lists" has the meaning set forth in Section 3(m)(vii) of this Agreement.
"Material Adverse Effect" means a material adverse effect on the assets, properties, operations, results of operations, condition (financial or otherwise) of Seller or the Business or on the ability of Seller to consummate the transactions contemplated herein or in the other Transaction Documents.
"Miscellaneous Design" ______________ Intentionally Omitted
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"Most Recent Balance Sheet" has the meaning set forth in Section 3(f)(i) of this Agreement.
"Most Recent Fiscal Year End" has the meaning set forth in Section 3(f)(i) of this Agreement.
"Net Tangible Assets" for purposes hereof, as of any date of determination (or date of estimated determination) shall be equal to the following as of such date or date of estimation: (i) cash, accounts receivable (net of reserves), inventories (net of reserves), prepaid and deferred promotion costs, prepaid expenses (except prepaid intercompany and prepaid divestiture expenses), leasehold improvements, furniture, fixtures and equipment, computer equipment, software and construction in progress (in each case net of all accumulated depreciation and amortization), and investment in joint venture, less (ii) accounts payable, deferred revenue, accrued payroll and related - withholdings, and other current liabilities, all incurred in the Ordinary Course of Business for the benefit of the Acquired Assets and Acquired Business consistent with Seller's past custom and practice, and as reflected on the Closing Date Net Tangible Asset Statement as determined in accordance with GAAP consistently applied.
"Non-Compete Period" has the meaning set forth in Section 5(l)(A) of this Agreement.
"NTA Excess" has the meaning set forth in Section 2(f)(iv) of this Agreement.
"NTA Objections Statement" has the meaning set forth in Section 2(f)(ii) of this Agreement.
"NTA Shortfall" has the meaning set forth in Section 2(f)(iii) of this Agreement.
“Option Shares” has the meaning set forth in Section 2(j) of this Agreement
"Order" means any order, judgment, ruling, injunction, award, decree, charge or writ.
"Ordinary Course of Business" means the ordinary course of business of Seller consistent with past custom and practice (including with respect to quantity and frequency) and for the direct benefit of the Acquired Business or the Acquired Assets.
"Parent" has the meaning set forth in the preface of this Agreement.
"Parties" has the meaning set forth in the preface of this Agreement.
"Person" means an individual, a partnership (general or limited), a member, a corporation, a limited liability company or partnership, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity (or any department, agency or political subdivision thereof).
"Post-Closing Determination" has the meaning set forth in Section 2(f)(ii) of this Agreement.
"Purchase Price" has the meaning set forth in Section 2(c) of this Agreement.
"Registration Rights Agreement" has the meaning set forth in Section 2(c)(i) of this Agreement.
"Required Consents" has the meaning set forth in Section 3(c) of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge or other security interest, except for (i) minor imperfections of title and liens which are not substantial in amount, which do not materially detract from the property subject thereto or materially impair the use of the property in the Business and which have arisen in the Ordinary Course of Business, (ii) liens for Taxes not yet due or which are being contested in good faith by appropriate proceedings, (iii) pledges or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation, (iv) carriers, warehousemen's, mechanics', materialmen's, repairmen's or other like liens arising in the Ordinary Course of Business which are not overdue for a period of more than 90 days or which are being contested in good faith by appropriate proceedings, and (v) statutory and contractual liens in favor of landlords securing leases.
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"Seller" has the meaning set forth in the preface to this Agreement.
"Seller's Accountant" has the meaning set forth in Section 2(f)(i) of this Agreement.
"Seller Indemnified Parties" has the meaning set forth in Section 5(e)(i) of this Agreement.
"Seller Indemnified Party" has the meaning set forth in Section 5(e)(i) of this Agreement.
"Service Agreement" has the meaning set forth in Section 7(a)(viii) of this Agreement.
"Shares" has the meaning set forth in Section 2(c)(i) of this Agreement.
"Signing Stock Price" means the average closing price of the Common Stock, as published in the Wall Street Journal, of the five trading days immediately prior to the signing of this Agreement.
“Straddle Non-Income Tax Returns" has the meaning set forth in Section 5(n)(i) of this Agreement.
"Sublease" has the meaning set forth in Section 3(l)(ii) of this Agreement.
"Subsidiary" means any corporation with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors.
"Tax" means any Federal, state, local and foreign income, profits, franchise, gross receipts, payroll, employment, sales, use, property, withholding, excise and other tax, duty or assessment of any nature whatsoever, together with all interest, penalties and additions imposed with respect thereto. The term "taxable" shall have a correlative meaning.
Taking" has the meaning set forth in Section 5(m)(ii) of this Agreement.
"Tax Return" means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto and including any amendment thereof.
"Third-Party Claim" has the meaning set forth in Section 5(f)(i) of this Agreement.
"Third-Party Firm" has the meaning set forth in Section 2(f)(ii) of this Agreement.
"Transaction Documents" means this Agreement, the Escrow Agreement, the Registration Rights Agreement, the Lease, the Sublease, the License Agreement, the Service Agreement, the GDI Agreement, and every other instrument and document entered into in connection with this Agreement.
"Transaction Expenses" has the meaning set forth in Section 10(m) of this Agreement.
"WARN Act" has the meaning set forth in Section 5(w)(v) of this Agreement.
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Exhibit A
LUXEYARD INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION is granted as of February 22, 2012 by LUXEYARD, INC. a Delaware corporation (the “Company”), to Xxxxxxx Xxxxx(“Optionee”).
(b) Termination of Employment. Intentionally omitted since Optionee is not an employee.
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3. Method of Exercise and Payment.
(a) When exercisable under Section 2 or Section 7, this Option may be exercised by written notice, pursuant to Section 9, to the Company’s Chief Operating Officer specifying the number of Option Shares to be purchased (the “Notice”). The Notice shall be accompanied by payment of the aggregate Option Price of the Option Shares being purchased (a) in cash, (b) by certified check payable to the order of the Company or (c) by a combination of the foregoing. Such exercise shall be effective upon the actual receipt by the Company’s Vice President of such Notice and payment.
(b) Unless the Option Shares are covered by a then current registration statement or a Notification under Regulation A under the Securities Act of 1933, as amended (the “Act”), and current registrations under all applicable state securities laws, the Notice shall include Optionee’s acknowledgement, in form and substance satisfactory to the Company, that Optionee (a) is purchasing such Option Shares for investment and not for distribution or resale (other than a distribution or resale which, in the opinion of counsel satisfactory to the Company, may be made without violating the registration provisions of the Act or any state securities laws), (b) has been advised and understands that (i) the Option Shares have not been registered under the Act and are “restricted securities” within the meaning of Rule 144 under the Act and are subject to restrictions on transfer, (ii) the Company is under no obligation to register the Option Shares under the Act or to take any action which would make available to Optionee any exemption from such registration, and (iii) the Option Shares may not be transferred without compliance with all applicable federal and state securities laws.
(c) In addition, except as provided below, Optionee may make payment in whole or in part in shares of the Company’s Common Stock held by the Optionee for more than six months. If payment is made in whole or in part in shares of the Company’s Common Stock, then Optionee shall deliver to the Company certificates registered in the name of Optionee representing shares of the Company’s Common Stock legally and beneficially owned by Optionee, free of all liens, claims and encumbrances of every kind and having a Fair Market Value (as defined in the Plan) on the date of delivery of such notice that is not greater than the Option Price of the Option Shares with respect to which the Option is to be exercised, accompanied by stock powers duly endorsed in blank by the record holder of the shares represented by such certificates. Notwithstanding the foregoing, the Committee, in its sole discretion, may refuse to accept shares of the Company’s Common Stock in payment of the Option Price. In that event, any certificates representing shares of the Company’s Common Stock which were delivered to the Company shall be returned to Optionee with notice of the refusal of the Committee to accept such shares in payment of the Option Price. Furthermore, the Committee may impose such limitations and prohibitions on the use of shares of the Company’s Common Stock to exercise the Option as it deems appropriate.
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Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the Company has granted this Option on the day and year first above written.
LUXEYARD INC. | |||
By: | |||
Name: Xxxxxx Xxxxxxx | |||
Title: CEO | |||
ACCEPTED BY: | |||
Xxxxxxx Xxxxx |
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Exhibit B
LOCK-UP AGREEMENT
This LOCK-UP AGREEMENT (this “Agreement”), dated as of February 22, 2012 between LUXEYARD, INC. a corporation organized under the laws of Delaware (the “Company”), and Xxxxxxx Xxxxx (the “Holder”). The Company and the Holder are referred to herein individually as a “Party” and collectively as the “Parties.”
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If to the Company, to: |
LY Retail LLC d/b/a Xxxxxxxx.xxx Xxx Xxxxxxx, Xx. 00000 Attention: Xxxxxx Xxxxxxx, Chief Financial Officer Telephone No.: 000-000-0000 xxx 000 Facsimile No.: ______________ | |
With copies to: |
Xxxxxx & Jaclin, LLP 000 Xxxxx 0 Xxxxx, Xxxxx 000 Xxxxxxxxx, Xxx Xxxxxx 00000 Attention: Xxxxxxx X Xxxxxx, Esq. Telephone No.: 000-000-0000 Facsimile No.: 000-000-0000 | |
If to the Holder: | The address set forth on the signature page hereto. |
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Xxxxxxx Xxxxx | |||
Address for notice: | |||
Xxxxxxx Xxxxx | |||
c/o Xxxxxxxxx Xxxx | |||
00-00 00xx Xxxxxx | |||
Xxxxxxx, Xxx Xxxx 00000 | |||
LUXEYARD INC. | |||
By: | |||
Name: | Xxxxxx Xxxxxxx | ||
Title: | Chief Executive Officer, |
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Exhibit C
XXXX OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS XXXX OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made and entered into as of this 22nd day of February, 2012 (the “Effective Date”), by and among eOPULENCE LLC, a New York corporation (“Seller”), and LY Retail LLC, a California Limited Liability Company (“Buyer”). Buyer and Seller are referred to collectively herein as the "Parties.”
WHEREAS, Seller and Buyer are parties to that certain Asset Purchase Agreement of even date herewith (the “Purchase Agreement”), pursuant to which Buyer has purchased certain assets of Seller;
WHEREAS, the Asset Purchase Agreement provides for, among other things, the transfer and sale to Buyer of certain assets of Seller, all as more fully described in the Purchase Agreement, for consideration in the amount and upon the terms provided in the Purchase Agreement;
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8. Governing Law/Arbitration Of Disputes.
(c) Governing Law; Written Decision. Any arbitration hereunder or under any Transaction Document, shall be governed by the laws of the State of Delaware, which laws the Arbitrator shall apply in rendering his or her decision. The Arbitrator shall issue a written decision, setting forth findings of fact and conclusions of law, within 60 days after he or she shall have been selected. The Arbitrator shall have no authority to award punitive or other exemplary damages.
(d) Procedures; Evidence; Experts.
(i) Any arbitration instituted by a Party shall be held in Los Angeles, CA in accordance with and under the then-current provisions of the rules of the American Arbitration Association, except as otherwise provided herein.
(ii) On application to the Arbitrator, any Party shall have rights to discovery to the same extent as would be provided under the Federal Rules of Civil Procedure and the Federal Rules of Evidence shall apply to any Arbitration under this Agreement; provided, however, that the Arbitrator shall limit any discovery or evidence such that his or her decision shall be rendered within the period referred to in Section 9(c).
(iii) The Arbitrator may, at his or her discretion and at the expense of the Party (ies) who will bear the cost of the Arbitration, employ experts to assist him or her in his or her determinations.
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(j) WAIVER OF JURY TRIAL; EXEMPLARY DAMAGES. ALL PARTIES HEREBY WAIVE THEIR RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT OR ANY TRANSACTION DOCUMENT. No Party shall be awarded punitive or other exemplary damages respecting any dispute arising under this Agreement or any Transaction Document.
Please have an authorized representative of each Party sign in the place indicated below which will confirm each Parties’ acceptance of the terms and conditions set forth this Agreement.
Agreed and Accepted:
L LLC | eOPULENCE LLC | |||
By: | By: | |||
Xxxxxxx Xxxxx | ||||
Its: | By: | |||
Xxxxxxxxx Xxxx |
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