STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is dated the 26th
day of June, 1998, by and among IME, INC., a Nevada corporation formerly known
as SLI, Inc. ("Buyer"), ITEX CORPORATION, a Nevada corporation ("ITEX"), ▇▇▇▇
▇▇▇▇▇▇, an individual resident of Nevada ("Seller"), BUSINESS EXCHANGE
INTERNATIONAL CORP., a Nevada corporation (the "Company"), and BXI TRADE
EXCHANGE, INC., a California corporation formerly known as BX International,
Inc. ("BXI").
RECITALS
A. Seller owns 12,500 shares of capital stock (which represents 50
percent of the outstanding capital stock) of the Company, which in turn owns all
of the assets of a barter exchange business operated under the name "BXI Trade
Exchange" (the "Business").
B. Seller desires to sell, and Buyer desires to purchase, all of
Seller's shares of capital stock of the Company for the consideration and upon
the terms and subject to the conditions hereinafter set forth.
C. This Agreement is being entered into as contemplated by the
terms of a Settlement Agreement dated December 8, 1997, among ITEX, Buyer, the
Company, BXI, and Seller, and a Settlement Agreement dated as of March 25, 1998,
among Buyer, Seller, ITEX, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the
Company, BXI, ▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as amended by agreements dated
March 30, 1998, and March 31, 1998 (collectively, the "Settlement Agreement").
NOW, THEREFORE, in consideration of the foregoing, and for other
consideration, the receipt and sufficiency of which are acknowledged, the
parties agree as follows:
I ARTICLE
PURCHASE AND SALE
1.1 Agreement to Purchase and Sell. Upon the terms and subject to
the conditions set forth in this Agreement, on the Closing Date (as defined
below), Seller shall sell and deliver to Buyer, and Buyer shall purchase from
Seller, 12,500 shares (the "Shares") of common stock, par value $1.00, of the
Company ("Common Stock"), constituting all shares of the Company's capital stock
owned by Seller.
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1.2 Purchase Price. In exchange for the Shares, Buyer agrees to
pay to Seller consideration in the amount of Three Million Six Hundred Thousand
Dollars ($3,600,000) (the "Purchase Price").
1.3 Payment of Purchase Price. Seller hereby acknowledges receipt
of One Million Dollars ($1,000,000) which was previously paid by Buyer on April
2, 1998 as a non-refundable deposit to be applied towards payment of the
Purchase Price by Buyer if and when the Closing (as defined below) occurs. The
balance of the Purchase Price of Two Million Six Hundred Thousand Dollars
($2,600,000) (the "Remaining Purchase Price") shall be payable in cash on the
Closing Date by wire transfer pursuant to instructions given by Seller.
1.4 Reimbursement for Offices. Buyer also agrees to pay to Seller
the additional sum of $125,000 (the "Additional Consideration") as reimbursement
for moneys advanced to the Company or BXI to purchase the Savannah and St. Louis
offices of the Business. The Additional Consideration shall be payable in cash
on the Closing Date by wire transfer and may be combined with the Remaining
Purchase Price. Buyer hereby acknowledges and agrees that ▇▇▇▇▇ ▇▇▇▇▇ will be
permitted to operate the Savannah office as a BXI office, subject to a 75%/25%
arrangement, upon the payment of $55,000 to Buyer, and will acquire the BXI
Broker rights to the Savannah area.
1.5 Closing. The closing of the purchase and sale of the Shares
(the "Closing") shall take place on a date mutually agreed upon by Buyer and
Seller, but no later than June 30, 1998, or such later date as may be mutually
agreed by Buyer and Seller (such date, the "Closing Date"), at the offices of
Miller, Nash, Wiener, Hager & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
II ARTICLE
REPRESENTATIONS AND WARRANTIES OF SELLER, COMPANY AND BXI
As a material inducement to Buyer to enter into this Agreement and
to purchase the Shares, Seller, the Company, jointly and severally, represent
and warrant as follows:
2.1 Corporate.
(a) Existence; Good Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Nevada. BXI is a corporation duly organized, validly existing and in
good standing under the laws of the state of California.
(b) Capitalization. The authorized capital stock of the
Company consists solely of 25,000 shares of Common Stock, of which 25,000 shares
and no more are presently issued and outstanding. All issued and outstanding
shares of Common Stock have
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been validly issued and are fully paid and nonassessable. Except for rights
granted pursuant to this Agreement, there are no outstanding rights, warrants,
options, subscriptions, agreements, commitments or understandings giving anyone
any right to require the Company to sell or issue, or the Seller to sell, any
capital stock or other securities of the Company.
(c) Corporate Power and Qualifications. The Company has
full power and authority, corporate and other, to own or lease and operate its
properties and assets and to carry on its business as and where such is now
being conducted, including the Business. The Company is duly licensed or
qualified to do business and is in good standing under the laws of California
and Nevada.
(d) No Subsidiaries or Affiliated Entities. The Company
does not own an interest, directly or indirectly, in any other corporation,
partnership, business trust, joint stock company, or other business organization
or association.
(e) Articles of Incorporation; Bylaws; Corporate Records.
The copies of the Company's articles of incorporation and bylaws which have
heretofore been delivered to Buyer are complete and correct as amended or
restated to the date hereof. The corporate minute books, shareholder lists and
stock transfer records of the Company previously made available to Buyer for
review contain the minutes of all meetings of directors and shareholders and
certificates reflecting all actions taken by the directors or shareholders with
or without a meeting, from the date of incorporation of the Company to the date
hereof.
(f) Officers and Directors; Bank Accounts; Powers of
Attorney. The officers and directors of the Company are as set forth in Schedule
2.1(f). Schedule 2.1(f) also sets forth (i) the name of each bank, savings
institution or other person with which the Company has an account or safe
deposit box and the names and identification of all persons authorized to draw
thereon or to have access thereto, and (ii) the names of all persons, if any,
holding powers of attorney from the Company and a summary statement of the terms
thereof.
(g) City Valley Trading, Inc. City Valley Trading, Inc., a
Nevada corporation, holds no assets of the Business and has no relationship to
the Business or to the Company other than as a result of its ownership of all
the outstanding shares of BXI.
2.2 No Violation. Neither the execution and delivery of this
Agreement or other documents and instruments to be executed and delivered by
Seller, BXI or the Company pursuant hereto, including, without limitation, a
consulting and noncompetition agreement between the Company and Seller
substantially in the form attached hereto as Exhibit A and an employment
agreement between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in substantially the form
attached hereto as Exhibit B (together with this Agreement, the "Transaction
Documents"), nor the consummation by Seller, BXI or the Company of the
transactions contemplated hereby and thereby (the "Transactions") (a) will
violate any statute or law or any rule, regulation, order, writ, injunction or
decree of any court or governmental authority, (b) will require any
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authorization, consent, approval, exemption or other action by or notice to any
court, administrative or governmental agency, instrumentality, commission,
authority, board or body or any other third party or (c) will violate or
conflict with, or constitute a default under, or will result in the acceleration
of or entitle any party to accelerate (whether after the giving of notice or the
lapse of time or both) any obligation under, or will result in the termination
of, or any material Lien (as defined in Section 2.8) upon any of the assets of
the Company under, any term or provision of the articles of incorporation or
bylaws of BXI or the Company or of any material contract, commitment,
understanding, arrangement, agreement or restriction of any kind or character to
which BXI or the Company is a party or by which any of the Company's assets or
properties or the shares of the Company may be bound or affected.
2.3 Validity and Effect. The execution and delivery of this
Agreement and all other Transaction Documents by the Company and BXI, and the
consummation by each of them of the Transactions, have been duly authorized by
all requisite corporate action. This Agreement constitutes, and any other
Transaction Documents which are to be executed and delivered by the Company and
BXI, when executed and delivered pursuant hereto, will constitute the valid and
legally binding obligations of the Company and BXI, enforceable in accordance
with their respective terms subject to applicable bankruptcy, insolvency and
similar laws affecting the rights of creditors generally and to general
equitable principles.
2.4 Financial Statements. Seller has furnished to Buyer financial
data for such periods as has been requested by Buyer (the "Business Financial
Data"). Such data is correct and complete in all material respects and fairly
presents the financial information requested.
2.5 Absence of Certain Changes. Other than in connection with this
Agreement, the other Transaction Documents, and the Transactions, since the date
of the most recent balance sheet included in the Business Financial Statements:
(a) Adverse Change. There has not been a material adverse
change in the condition (financial or otherwise), results of operations,
business, assets, liabilities, or prospects of the Company or the Business;
(b) Damage. There has not been any material loss, damage
or destruction, whether covered by insurance or not, affecting the Company or
the Business;
(c) Increase in Compensation. There has not been any
increase in the compensation, salaries, or wages payable or to become payable to
any employee or agent of the Company (including, without limitation, any
increase or change pursuant to any bonus, pension, profit sharing, retirement,
or other plan or commitment), or any bonus or other employee benefit granted,
made, or accrued other than in the ordinary course of business or as
contemplated by the Transaction Documents;
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(d) Labor Disputes. There has not been any labor dispute
or disturbance, other than routine individual grievances which are not material
to the business, financial condition, or results of operations of the Company or
the Business;
(e) Commitments. The Company has not made any commitment
or engaged in any transaction (including, without limitation, any capital
expenditure) other than in the ordinary course of business consistent with past
practice;
(f) Dividends; Liquidation. The Company has not declared,
set aside, or paid any dividend or any other distribution in respect of the
Company s capital stock; or made any redemption, purchase or other acquisition
of any capital stock of the Company, or any security relating thereto; or taken
any steps looking toward the dissolution or liquidation of the Company;
(g) Disposition of Property. Except for the items detailed
in paragraph 1 of the December 8, 1997 agreement, (i) the Company has not sold,
leased, transferred or disposed of any of its properties or assets and (ii) BXI
has not sold, leased, transferred or disposed of any properties or assets used
in the Business other than to the Company, except for sales of inventory,
consumption of supplies, and nonmaterial dispositions of worn or broken parts
and equipment in the ordinary course of business;
(h) Indebtedness. The Company has not incurred, assumed or
guaranteed any indebtedness for borrowed money other than changes in the Company
s line of credit in the ordinary course of business;
(i) Contracts. The Company has not entered into, amended
or terminated any lease, agreement or other contract or legally binding
contractual right or obligation, whether written or oral, express or implied (a
"Contract"), or waived any material rights thereunder, other than in the
ordinary course of business;
(j) Loans, Advances, or Credit. Other than in the ordinary
course of business consistent with past practice, the Company has not made any
loan or advance or any grant of credit;
(k) Unusual Events. No other event or condition
specifically related to the Company or the Business not in the ordinary course
of business has occurred which would have a Material Adverse Effect.
2.6 Absence of Undisclosed Liabilities. Other than in connection
with this Agreement, the other Transaction Documents and the Transactions or to
the extent specifically disclosed in the Business Financial Data, the Company
does not have any liabilities whatsoever, whether accrued, absolute, contingent
or otherwise, other than commercial liabilities and obligations incurred since
the date of the most recent balance sheet included in
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the Business Financial Data in the ordinary course of business consistent with
past practice, none of which has or will have a Material Adverse Effect. Other
than a promissory note of the Company in the amount of $782,750.65 in favor of
BXI, the Company is not obligated to make any payment to any person as
consideration for the transfer by BXI of assets used in connection with the
Business to the Company effective December 31, 1997. 2.7 Title to Shares. The
Shares are duly authorized, validly issued, fully paid and nonassessable and are
owned by Seller free and clear of all Liens, including limitations affecting
Seller's ability to vote the Shares and restrictions on transferability of the
Shares. The Shares are subject to no restrictions with respect to
transferability to Buyer in accordance with the terms of this Agreement. Upon
transfer of the Shares by Seller, Buyer will, as a result, receive good and
marketable title to all of the Shares, free and clear of all Liens, including
limitations on voting power and restrictions on transferability of the Shares
other than any such restrictions imposed by federal or state securities laws.
2.8 Title to Property and Assets. Except for the Kingman, Arizona
real estate, the Company has good and marketable title to all of its tangible
properties and assets, and none of such properties or assets is subject to a
Contract of sale or subject to any mortgages, liens (statutory or otherwise),
security interests, claims, pledges, equities, options, conditional sales
contracts, assessments, levies, easements, covenants, reservations,
restrictions, exceptions, limitations, charges or encumbrances of any nature
whatsoever (collectively, "Liens"), in any case except as disclosed on Schedule
2.8. Except as disclosed on Schedule 2.8, such tangible properties and assets
constitute all of the tangible properties and assets required to be used in, or
desirable for use in, the operation of the Business, including, without
limitation, the tangible properties and assets of the Savannah and St. Louis
offices of the Business.
2.9 Condition of Personal Property. All tangible personal
property, equipment, and fixtures included within the assets of the Company are
in good, merchantable or in reasonably repairable condition and are suitable for
the purposes for which they are used.
2.10 Real Property.
(a) Schedule 2.10(a) contains a list of all real property
owned by the Company and of any Lien thereon.
(b) Effective December 31, 1997, BXI and the Company
executed and delivered instruments effecting the assignment of all real property
leases relating to the Business to the Company. Each lease listed on Schedule
2.10(b) is a valid and legally binding obligation of all parties thereto, and
the Company is not in default thereunder.
2.11 No Litigation. Other than as shown on Schedule 2.11, there is
no action, suit, arbitration, proceeding, investigation, or inquiry pending or,
to the knowledge of
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Seller, threatened against the Company or BXI. Schedule 2.11 identifies all
material actions, suits, proceedings, investigations, and inquiries to which the
Company or BXI has been a party since January 1, 1993, other than the
proceedings referred to in the Settlement Agreement. Other than as shown on
Schedule 2.11 or in connection with the proceedings referred to in the
Settlement Agreement, neither the Company or BXI nor any of their assets are
subject to any judgment, order, writ or injunction of any court, arbitrator, or
federal, state, foreign, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality.
2.12 Compliance With Laws.
(a) Compliance. The Company (including each and all of its
operations, practices, properties, and assets) and the Business are in material
compliance, consistent with current industry practices as followed by ITEX, with
all applicable federal, state, local, and foreign laws, ordinances, orders,
rules, and regulations (collectively, "Laws"), including, without limitation,
those applicable to discrimination in employment, occupational safety and
health, trade practices, environmental protection, competition and pricing,
zoning, building and sanitation, employment, retirement and labor relations, and
advertising, except to the extent any noncompliance would not have a Material
Adverse Effect. The Company has not received notice of any violation or alleged
violation of, and is not subject to liability for past or continuing violation
of, any Laws. All reports and returns required to be filed by the Company with
any governmental authority have been filed, and were accurate and complete when
filed except to the extent any deficiency would not have a Material Adverse
Effect.
(b) Licenses and Permits. The Company has obtained all
licenses, permits, approvals, authorizations, and consents ("Permits") of all
governmental and regulatory authorities and all certification organizations
required for the conduct of the Business except to the extent failure to do so
would not have a Material Adverse Effect. All such Permits are listed in
Schedule 2.12(b) and are in full force and effect. The Company (including its
operations, properties, and assets) is and has been in compliance with all such
Permits, except to the extent any noncompliance would not have a Material
Adverse Effect.
2.13 Insurance. The Company maintains workers compensation and
health and other forms of insurance with such coverage limits and deductible
amounts as are reasonable and prudent in light of the nature of its assets and
the risks of its business.
2.14 Contracts and Commitments.
(a) Leases of Personal Property. Effective December 31,
1997, BXI and the Company executed instruments effecting the assignment of all
leases of personal property relating to the Business to the Company. Set forth
on Schedule 2.14(a) is a list of
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each lease of equipment or other personal property to which the
Company is a party or assignee involving the payment of more than $10,000.
(b) Purchase Commitments. Set forth on Schedule 2.14(b) is
a list of all agreements (written or oral) between the Company and third parties
for the purchase of goods and supplies by the Company which individually call
for the payment by the Company after the date of this Agreement of more than
$10,000 or which obligate the Company for a period of more than six months from
the date hereof.
(c) Broker Agreements. Set forth in Schedule 2.14(c) is a
list and description of all presently effective agreements (written or oral)
between the Company and any broker with respect to the Business. Effective
December 31, 1997, BXI and the Company executed and delivered instruments
effecting the assignment of all broker agreements to the Company.
(d) Membership Agreements. Effective December 31, 1997,
BXI and the Company executed and delivered instruments transferring membership
agreements relating to the Business to the Company and sent written notices to
all members of the BXI Trade Exchange of the transfer.
(e) Contracts With Seller and Certain Others. Except for
the employment relationship that exists between Seller and the Company, the
Company has no agreement, understanding, contract or commitment (written or
oral) with Seller or any relative of Seller, except the New York office is
operated by and owned by a relative of Seller.
(f) Collective Bargaining Agreements. The Company is not a
party to any collective bargaining agreement with any union.
(g) Loan Agreements. Except as set forth on Schedule
2.14(g), the Company is not obligated under any loan agreement, promissory note,
letter of credit, or other evidence of indebtedness as signatory, guarantor or
otherwise.
(h) Guarantees. The Company has not, under any instrument
which is presently effective, guaranteed the payment or performance of any
person, firm or corporation, agreed to indemnify any person or act as a surety,
or otherwise agreed to be contingently or secondarily liable for the obligations
of any person.
(i) Restrictive Agreements. The Company is not a party to
nor is it bound by any agreement requiring it to assign any interest in any
trade secret or proprietary information, or prohibiting or restricting it from
competing in any business or geographical area or soliciting customers or
otherwise restricting it from carrying on its business anywhere in the world.
ITEX has reviewed and accepted existing broker agreements.
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(j) Other Material Contracts. The Company is not a party
to any lease, license, contract or commitment of any nature involving
consideration or other expenditure in excess of $10,000 or involving performance
over a period of more than six months from the date hereof, or which is
otherwise individually material to the operations of the Company, other than
agreements listed on Schedules 2.10(a), 2.10(b), 2.14(a), 2.14(b), 2.14(c),
2.14(g), or 2.14(j). Effective December 31, 1997, BXI and the Company executed
and delivered instruments effecting the assignment of all contracts or
agreements material to the operation of the Business to which BXI was a party to
the Company.
(k) No Default. The Company is not in default under any
material lease, agreement, contract or commitment, nor has any event or omission
occurred which through the passage of time or the giving of notice, or both,
would constitute a default thereunder or cause the acceleration of any of the
Company s obligations or result in the creation of any Lien on any of the assets
owned, used or occupied by the Company. To the knowledge of Seller, no third
party is in default under any material lease, agreement, contract or commitment
to which the Company is a party, nor has any event or omission occurred which,
through the passage of time or the giving of notice, or both, would constitute a
default thereunder or give rise to an automatic termination, or the right of
discretionary termination thereof.
2.15 Employee Benefit Plans. Set forth on Schedule 2.15 is a
description of all pension, profit sharing, retirement, bonus, executive or
deferred compensation, hospitalization and other similar fringe or employee
benefit plans, programs and arrangements, and any employment or consulting
contracts, and vacation and sick leave plans, including, without limitation, all
"employee benefit plans" (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), all employee manuals, and
all written or binding oral statements of policies, practices or understandings
relating to employment, which are provided to, for the benefit or, or relate to,
any persons employed by the Company. The items described in the foregoing
sentence are hereinafter sometimes referred to collectively as "Employee
Plans/Agreements." The Company is in compliance with and has made all payments
due under all Employee Plans/Agreements and with respect thereto the Company is
in material compliance with all Laws. The Company is not a contributor to any
multi-employer pension plan which has an unfunded liability with respect to
benefits due its participants. The Company has no existing "golden parachute" or
severance arrangements.
2.16 Employment Compensation. Buyer has had an opportunity to
review all employee records.
2.17 Patents, Trademarks, etc. Set forth on Schedule 2.17 is a
list of all United States and foreign trademarks, service marks, trade names,
brand names, copyrights, including registrations and applications, patent and
patent applications, and employee covenants and agreements respecting
intellectual property ("Trade Rights") in which the
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Company now has any interest, specifying the basis on which such Trade Rights
are owned, controlled, used or held (under license or otherwise) by the Company,
and also indicating which of such Trade Rights are registered. All Trade Rights
shown as registered in Schedule 2.17 have been properly registered, all pending
registrations and applications have been properly made and filed and all annual,
maintenance, renewal and other fees relating to registrations or applications
are current. In order to conduct the Business, the Company does not require any
Trade Rights that it does not already have. The Company is not infringing and
has not infringed on any Trade Rights of another in the operation of its
business, nor to the knowledge of Seller is any other person infringing on the
Trade Rights of the Company. The Company has not granted any license or made any
assignment of any Trade Right and no other person has any right to use any Trade
Right owned or held by the Company. The Company does not pay any royalties or
other consideration for the right to use any Trade Rights of others. Except as
set forth on Schedule 2.17, to the knowledge of Seller, there are no inquiries,
investigations or claims or litigation challenging or threatening to challenge
the Company s right, title and interest with respect to its continued use and
right to preclude others from using any Trade Rights of the Company. To the
knowledge of Seller, all Trade Rights of the Company are valid, enforceable and
in good standing, and there are no equitable defenses to enforcement based on
any act or omission of the Company.
2.18 Taxes.
(a) The Company (i) has duly and timely filed or caused to
be filed all federal, state, local and foreign tax returns (including, without
limitation, consolidated and/or combined tax returns) required to be filed by it
prior to the date of this Agreement which relate to the Company or with respect
to which the Company or the assets or properties of the Company are liable or
otherwise in any way subject ("Returns"), (ii) has paid or fully accrued for all
taxes shown to be due and payable on such Returns (which taxes are all the taxes
due and payable under the laws and regulations pursuant to which such Returns
were filed), and (iii) has properly accrued for all such taxes accrued in
respect of the Company or the assets and properties of the Company for periods
subsequent to the periods covered by such Returns. No Returns have been or are
being audited. No deficiency in payment of taxes for any period has been
asserted by any taxing body and remains unsettled at the date of this Agreement,
and no basis exists for any such assertion. There are no outstanding agreements
or waivers extending the statutory period of limitation for any federal or state
tax return of the Company for any period. The Company has made all required
deductions and payments and has properly prepared and delivered all required
documents in connection with the withholding of taxes from the wages and other
compensation of its employees. The Company has filed all sales/use tax returns
and has paid all such taxes for all states in which it is required to do so.
Copies of all Returns of the Company filed since January 1, 1994, have been made
available for inspection by Buyer.
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(b) All tax carryforwards generated by the Company prior
to the date of this Agreement are listed on Schedule 2.18, shall remain with the
Company and shall be unaffected by the terms of this Agreement and the
Transactions.
2.19 Records. The books of account of the Company fairly reflect
the items of income and expense and the assets, liabilities, and accruals of its
business and operations.
2.20 Disclosure. No representation or warranty by Seller, BXI or
the Company in this Agreement, nor any statement, certificate, schedule or
exhibit furnished or to be furnished by or on behalf of Seller pursuant to this
Agreement, nor any document or certificate delivered by Seller or the Company to
Buyer pursuant to this Agreement or in connection with the Transactions,
contains or shall contain any untrue statement of material fact or omits or
shall omit a material fact necessary to make the statements contained therein
not misleading. True and correct copies of all written documents listed in the
Schedules to this Agreement, including all amendments thereto, have heretofore
been made available for inspection by Buyer.
2.21 No Brokers. Neither Seller nor the Company has entered into
any contract, arrangement or understanding with any person or firm which may
result in the obligation of Buyer or the Company to pay any finder's fees,
brokerage or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the Transactions,
and neither Seller nor the Company is aware of any claim or basis for any claim
for payment of any finder's fees, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to this Agreement or the
consummation of the Transactions.
2.22 Representations and Warranties of BXI. As a material
inducement to Buyer to enter into this Agreement and to purchase the Shares, BXI
represents and warrants as follows:
(a) Corporate Existence. BXI is a corporation duly
organized and validly existing under the laws of the state of California. BXI
has full power and authority to enter into this Agreement, perform its
obligations hereunder, and consummate the transactions contemplated hereby.
(b) Authorization. All necessary and appropriate corporate
action has been taken by BXI with respect to the execution and delivery of this
Agreement and the performance by it of its obligations hereunder. This Agreement
has been duly and validly executed and delivered by BXI in the manner called for
by this Agreement and constitutes a valid and binding obligation of BXI,
enforceable in accordance with its terms subject, as to the enforcement of
remedies, to applicable bankruptcy, insolvency, and similar laws affecting the
rights of creditors generally and except as enforceability may be limited by
principles of equity relating to specific performance or injunctive relief.
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(c) Transfer of Assets of Trade Exchange. As of December
31, 1997, BXI transferred and sold to BEI substantially all of the assets, other
than the real property assets, comprising the barter exchange business operated
under the name "BXI Trade Exchange."
(d) Accuracy of Representations and Warranties. None of
the representations or warranties of BXI contain or will contain any untrue
statement of any material fact or omit or misstate a material fact necessary to
make the statements contained in this Agreement not misleading.
Except as expressly set forth herein, BXI makes no representations
or warranties concerning BXI or BEI or their respective Businesses, Seller, the
Shares, or the Business.
III ARTICLE
REPRESENTATIONS AND WARRANTIES OF BUYER AND ITEX
Buyer and ITEX, jointly and severally, hereby represent and
warrant to Seller, BXI and the Company as follows:
3.1 Corporate.
(a) Organization. Buyer is a corporation duly organized
and validly existing under the laws of the state of Nevada. ITEX is a
corporation duly organized and validly existing under the laws of the state of
Nevada.
(b) Corporate Power. Buyer has all requisite corporate
power and authority to enter into this Agreement and the other Transaction
Documents and to carry out the Transactions. ITEX has all requisite corporate
power and authority to enter into this Agreement and the other Transaction
Documents and to perform its obligations thereunder.
(c) Authority. The execution and delivery of this
Agreement and the consummation of the Transactions have been duly authorized by
the boards of directors of Buyer and ITEX. This Agreement constitutes the valid
and legally binding agreement of Buyer and ITEX, enforceable against each of
Buyer and ITEX in accordance with its terms subject to applicable bankruptcy,
insolvency and similar laws affecting the rights of creditors generally and to
general equitable principles.
3.2 No Violation. Neither the execution of this Agreement or the
other Transaction Documents by Buyer or ITEX, nor the consummation by Buyer or
ITEX of the Transactions, (a) will violate any statute or law or any rule,
regulation, order, writ, injunction or decree of any court or governmental
authority, (b) will require any authorization, consent, approval, exemption or
other action by or notice to any court, administrative or governmental
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agency, conflict with, or constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, or will result in
the termination of, or accelerate the performance required by, or result in the
creation of any material Lien upon any of the assets of Buyer under, any term or
provision of the Articles of Incorporation or Bylaws of Buyer or of any material
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character to which Buyer is a party or by which Buyer or any of its
assets or properties may be bound or affected.
3.3 Disclosure. No representation or warranty by Buyer or ITEX in
this Agreement nor any statement, certificate, schedule or exhibit furnished or
to be furnished by or on behalf of Buyer or ITEX pursuant to this Agreement, nor
any document or certificate delivered to Seller or the Company by Buyer or ITEX
pursuant to this Agreement or in connection with the Transactions, contains or
shall contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein not misleading.
IV ARTICLE COVENANTS
4.1 Covenants of Seller and the Company.
(a) Conduct of Business Pending the Closing. Seller and
the Company agree that from the date hereof until the Closing, except as
otherwise approved in writing by Buyer:
(i) No Changes. The Company will carry on its
business diligently and in the same manner as heretofore and will not
make or institute any changes in its methods of management, accounting or
operation of the Business.
(ii) Maintain Organization. The Company will use
its best efforts to maintain, preserve, renew and keep in force and
effect the existence, rights and franchises of the Company and to
preserve the business organization of the Company intact, to keep
available to Buyer the present officers and employees of the Company
other than Seller, and to preserve its present relationships with brokers
and customers and others having business relationships with the Company.
(iii) No Breach. The Company will use its best
efforts to avoid any act, or any omission to act, which may cause a
breach of any material Contract, commitment or obligation, or any breach
of any representation, warranty, covenant or agreement made by Seller,
the Company or BXI.
(iv) No Material Contracts. No Contract or
commitment will be entered into, and no purchase of assets (tangible or
intangible) will be made, by or
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on behalf of the Company, except Contracts, commitments, purchases or
sales which are contemplated by this Agreement or the Transaction
Documents or which are in the ordinary course of business and consistent
with past practice.
(v) No Corporate Changes. The Company will not
amend its Articles of Incorporation or Bylaws or make any changes in its
authorized or issued capital stock; the Company will not grant any option
or other right to acquire any shares of its authorized capital stock;
(vi) Maintenance of Insurance. The Company will
maintain all of its insurance in effect as of the date hereof or replace
such insurance with comparable coverage and will procure such additional
insurance as shall be reasonably requested by Buyer at Buyer's expense.
(vii) Maintenance of Property. The Company will
use, operate, maintain and repair all of its assets and properties in a
normal business manner consistent with the Company's past practices.
(viii) No Dividends. The Company will not declare or pay any dividend
(whether in cash, stock or property) or make any other distribution to
Seller.
(ix) Compensation. The Company will not increase
the compensation or benefits of any of its employees or make any other
change in the terms of their employment.
(x) Transfer of Assets. On or within 10 days after
the Closing Date, the Company will execute and deliver to BXI such
instruments of transfer as are necessary to effect a valid and complete
transfer or assignment of all of the real property listed in Schedule
2.10 (a), as well as certain personal property listed in Schedule 4.1
which is not used in connection with the operation of the Business, to
BXI. Seller will also provide evidence to Buyer's satisfaction that the
Company has been released from or is not obligated with respect to any
Liens on any such real or personal property. The parties hereto
acknowledge and agree that such transfer of assets will result in the
satisfaction in full of the Company's promissory note in favor of BXI in
the amount of $782,750.65, executed in connection with the transfer by
BXI of assets used in connection with the Business to the Company
effective December 31, 1997.
(xi) Payment of Net Cash Flow. Within 10 days after
the Closing Date, the Company will pay to BXI an amount in cash which
equals the net cash flow of the Business from December 31, 1997, until
the Closing Date, provided that the Company will retain a minimum of
$50,000 in cash. Within 5 days after the
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Closing Date, the Company will deliver to Buyer a schedule showing the
computation of net cash flow for purposes of the cash transfer.
4.2 Covenants of Seller and BXI. No sooner than one day after the
Closing Date and no later than 90 days after the Closing Date, Seller and BXI
shall take all necessary steps to change the corporate name of BXI Trade
Exchange, Inc., and any assumed business names of BXI, to a name that does not
include "BXI" or any other phrase similar enough to BXI Trade Exchange or BXI as
to be reasonably likely to cause confusion.
4.3 Covenants of Buyer and ITEX.
(a) Stock Incentive Plan for BXI Brokers. As additional
consideration, ITEX agrees to establish a stock incentive plan (the "Plan") for
the benefit of all Brokers of the BXI Trade Exchange within 90 days following
the Closing Date. For purposes of the Plan, the term "Brokers" shall mean all
brokers who are under written or oral contract with the Company as the Closing
Date either as a result of assignment of existing area broker agreements or
execution of a new agreement with the Company. The Plan shall provide for the
issuance of 150,000 shares of ITEX common stock (subject to adjustment for any
stock splits or stock dividends declared with respect to ITEX common stock after
March 25, 1998 and prior to such issuance). Such shares may be issued pursuant
to awards of shares and grants of warrants under the Plan, provided that the
number of shares subject to grants of warrants may not exceed 75,000. The
exercise price of such warrants shall be $7.00 per share. Such awards of shares
and grants of warrants may provide that vesting of such shares or exercisability
of such warrants will not occur until three years following the Closing Date and
may also provide that vesting or exercisability is subject to the satisfaction
of specified performance goals. Warrants granted pursuant to the Plan shall be
exercisable for a minimum of three years following vesting unless forfeited in
accordance with the terms of the Plan. The allocation of share awards and
warrants to the Brokers will be determined by a committee of four individuals,
consisting of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the President of the Broker Board elected at the
next election or his successor, a representative of ITEX, and ▇▇▇▇ ▇▇▇▇▇▇ or a
representative chosen by him. Any share awards or warrants which are forfeited
in accordance with the terms of the Plan will be made the subject of new awards
or warrants granted to other Brokers.
(b) Employment Agreement with ▇▇▇▇▇▇▇. Buyer and ITEX will
execute and deliver to Seller at the Closing an instrument guaranteeing the
performance by the Company of its obligations pursuant to an employment
agreement with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ substantially in the form of Exhibit B hereto.
(c) Consulting and Noncompetition Agreement with Seller.
Buyer and ITEX will execute and deliver to Seller at the Closing an instrument
guaranteeing the performance by the Company of its obligations pursuant to a
consulting and noncompetition agreement with Seller substantially in the form of
Exhibit A hereto.
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(d) Burbank Office. Buyer and ITEX will take all
reasonable steps to cause the Company (i) to continue to operate the Company's
Burbank, California office for a minimum of one year following the Closing Date
and (ii) to not terminate the employment of any person who was employed at the
Burbank, California office as of the Closing Date during that one-year period
other than for cause or by reason of voluntary resignation, death, disability or
retirement.
(e) Treatment of Employees. Following the Closing, Buyer
and ITEX will take all reasonable steps to cause the Company to treat all
employees and independent contractors of the Company who were previously
employed by ITEX in an equal manner as other employees and independent
contractors of the Company and will assure that such employees and independent
contractors are not the subject of any retaliatory actions by the Company due to
their previous employment by ITEX.
(f) Broker Commitments. Following the Closing, Buyer and
ITEX will take all reasonable steps to cause the Company to honor all confirmed
commitments to brokers of the BXI Trade Exchange pursuant to schedules of
service fees in place as of the Closing Date, including the oral agreements
listed in Schedule 4.3(f).
(g) Repayment of Broker Advances and Loans. Following
Closing, BEI will collect and pay to Yarmak on a monthly basis the loans and
advances from BXI to the Trade Exchange brokers listed on attached Schedule
4.3(g) by deducting said amounts from the commissions owed to the brokers by BEI
until paid in full.
V ARTICLE
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AND ITEX
Each and every obligation of Buyer or ITEX to be performed at the
Closing shall be subject to the satisfaction prior to or at the Closing (or the
waiver by Buyer) of each of the following conditions:
5.1 Representations and Warranties True at Closing. Each of the
representations and warranties made by Seller, BXI or the Company in this
Agreement, or in any instrument, schedule, list, certificate or writing
delivered by Seller or the Company pursuant to this Agreement, shall be true and
correct when made and shall be true and correct in all material respects at and
as of the Closing as though such representations and warranties were made as of
the Closing.
5.2 Compliance with Agreement and Delivery of Closing Documents.
Seller, BXI and the Company shall have in all material respects performed and
complied with all of the respective agreements and obligations under this
Agreement which are to be performed or complied with by Seller, BXI or the
Company prior to or as of the Closing, including the delivery of the closing
documents specified below:
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(a) Seller and the Company each shall have delivered to
Buyer a certificate dated the Closing Date to the effect that the respective
party has performed all agreements and covenants and satisfied all conditions on
the respective party's part required to be performed or satisfied by the Closing
Date pursuant to the terms of this Agreement.
(b) Seller shall have delivered to Buyer a Certificate of
the Secretary of State of the State of Nevada certifying as of a date reasonably
close to the Closing Date that the Company has filed all required reports, paid
all required fees and taxes, and is, as of such date, in good standing and
authorized to transact business as a domestic corporation.
(c) Seller shall have delivered the stock and minute books
of the Company and the written resignations, effective as of the Closing Date,
of all members of the Board of Directors and all officers of the Company and the
resignation of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as a director and as President of BXI, and shall
have caused all persons who have been designated by Buyer to be duly elected as
directors and officers of the Company as of the Closing Date.
(d) Seller shall have delivered to Buyer certificates and
other instruments representing all Shares, duly endorsed for transfer or
accompanied by appropriate stock powers (in either case executed in blank or in
favor of Buyer, together with all other documents necessary or appropriate to
validly transfer the Shares to Buyer free and clear of all Liens.
(e) Seller shall have delivered to Buyer the release
contemplated by paragraph 8 of the Settlement Agreement executed by the Company,
BXI, Seller and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
5.3 Absence of Suit. No action, suit, investigation or proceeding
before any court or any governmental authority shall have been commenced or
threatened against Buyer, the Company or any of the affiliates, officers or
directors of any of them, seeking to restrain, prevent or change the
Transactions, or questioning the validity or legality of any of the
Transactions, or seeking damages in connection with, or imposing any condition
on, any of the Transactions; provided that the obligations of Buyer shall not be
affected unless there is a reasonable likelihood that as a result of such
action, suit, investigation, or proceeding, Buyer will be unable to retain
substantially all the practical benefits of the Transactions to which it is
entitled under this Agreement.
5.4 Approvals; Consents. All consents, permits, approvals,
licenses or orders from any governmental or regulatory body or other third party
required to be obtained by Seller or the Company for the consummation of the
Transactions shall have been obtained except where failure to obtain such
consents, permits, approvals, licenses or orders would not have a Material
Adverse Effect (whether or not such effect is referred to or described in any
Schedule).
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5.5 Consulting and Noncompetition Agreement. Seller and the
Company shall have executed a consulting and noncompetition agreement
substantially in the form attached hereto as Exhibit A.
VI ARTICLE
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF SELLER, BXI AND THE COMPANY
Each and every obligation of Seller, BXI or the Company to be
performed at the Closing shall be subject to the satisfaction prior to or at the
Closing (or the waiver by Seller) of the following conditions:
6.1 Representations and Warranties True at Closing. Each of the
representations and warranties made by Buyer or ITEX in this Agreement, or in
any instrument, list, certificate or writing delivered by Buyer or ITEX pursuant
to this Agreement, shall be true and correct when made and shall be true and
correct in all material respects at and as of the Closing as though such
representations and warranties were made as of the Closing.
6.2 Compliance With Agreement and Delivery of Closing Documents.
Buyer and ITEX shall have in all material respects performed and complied with
all of the respective agreements and obligations under this Agreement which are
to be performed or complied with by Buyer or ITEX prior to or as of the Closing,
including the delivery of the closing documents specified below:
(a) Buyer and ITEX each shall have delivered to Seller a
certificate dated the Closing Date to the effect that the respective party has
performed all agreements, and covenants and satisfied all conditions on the
respective party's part required to be performed or satisfied by the Closing
Date pursuant to the terms of this Agreement.
(b) Buyer shall have effected payment of the Remaining
Purchase Price and the Additional Consideration in accordance with the prior
written instructions of Seller.
(c) Buyer shall have delivered to Seller the release
contemplated by paragraph 9 of the Settlement Agreement executed by Buyer, ITEX,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
(d) Within 14 days after the Closing Date, Buyer will
execute satisfaction in full of all judgments against Seller and Seller will
cause all steps to be taken by all appellants that may be necessary to dismiss
any outstanding appeals of such judgments.
6.3 Absence of Suit. No action, suit, investigation, or proceeding
before any court or any governmental authority shall have been commenced or
threatened against
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Buyer, the Company or any of the affiliates, officers or directors of any of
them, seeking to restrain, prevent or change the Transactions, or questioning
the validity or legality of any of the Transactions, or seeking damages in
connection with, or imposing any condition on, any of the Transactions; provided
that the obligations of Seller shall not be affected unless there is a
reasonable likelihood that as a result of such action, suit, proceeding or
investigation, the Seller will be unable to retain substantially all the
consideration to which he is entitled under this Agreement.
6.4 Guarantee of Consulting and Noncompetition Agreement. Buyer
and ITEX shall have executed and delivered to Seller an instrument guaranteeing
the Company's performance of its obligations pursuant to a consulting and
noncompetition agreement between Seller and the Company substantially in the
form attached hereto as Exhibit A.
6.5 Guarantee of Employment Agreement. Buyer and ITEX shall have
executed and delivered to Seller an instrument guaranteeing the Company's
performance of its obligations pursuant to an employment agreement between the
Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ substantially in the form attached hereto as Exhibit
B.
VII ARTICLE
INDEMNIFICATION
7.1 Indemnification by Seller and BXI.
(a) Seller hereby agrees to indemnify, defend, and hold
Buyer and ITEX (and their directors, officers, shareholders, employees,
affiliates, agents and assigns) harmless from and against all Claims (as defined
below) asserted against, imposed upon, or incurred by Buyer or ITEX directly or
indirectly by reason of, arising out of, or resulting from (a) the inaccuracy or
breach of any representation or warranty of Seller or BXI contained in or made
pursuant to this Agreement or in any of the documents delivered pursuant hereto,
(b) the non-performance or breach of any covenant, term or provision to be
performed by Seller contained in this Agreement or in any of the Transaction
Documents, or (c) any action, suit, or proceeding identified in Schedule 2.11.
The indemnification obligations of Seller hereunder are with respect to the full
amount of the Claims (as defined below). As used in this Article VII, the term
"Claim" shall include any and all losses, liabilities, damages, deficiencies,
assessments, judgments, awards, settlements, costs, and expenses, including
without limitation penalties, court costs, and attorney fees and expenses at
trial and on appeal.
(b) Buyer's and ITEX's right to indemnification as
provided in this Section 7.1 shall not be eliminated, reduced or modified in any
way as a result of the fact that (i) Buyer or ITEX had notice of a breach or
inaccuracy of any representation, warranty or covenant contained herein (except
as set forth in any Schedules hereto), or (ii) Buyer or ITEX
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has been provided with access to officers and employees of the Company and the
Company's books, documents, contracts and records.
7.2 Indemnification by Buyer and ITEX. Buyer and ITEX hereby agree
to indemnify, defend, and hold harmless Seller and BXI from and against all
Claims asserted against, imposed upon, or incurred by Seller or BXI directly or
indirectly by reason of, arising out of, or resulting from (a) the inaccuracy or
breach of any representation or warranty of Buyer or ITEX contained in or made
pursuant to this Agreement or in any of the documents delivered pursuant hereto,
or (b) the non-performance or breach of any covenant, term or provision to be
performed by Buyer or ITEX contained in this Agreement or in any of the
Transaction Documents.
7.3 (Intentionally Omitted.)
7.4 Notice; Defense of Claims. If a claim is to be made by a party
entitled to indemnification hereunder, the party entitled to such
indemnification shall give written notice to the indemnifying party immediately
after the party entitled to indemnification becomes aware of any fact, condition
or event which may give rise to a matter for which indemnification may be
sought; provided that the failure of any indemnified party to give timely notice
shall not affect the rights to indemnification hereunder except to the extent
that the indemnifying party demonstrates actual damage caused by such failure.
If any lawsuit or enforcement action is filed against any party entitled to the
benefit of indemnity hereunder, and if the indemnifying party shall acknowledge
in writing to the indemnified party that the indemnifying party shall be
obligated under the terms of its indemnity hereunder in connection with such
lawsuit, action or claim, then the indemnifying party shall be entitled, if it
so elects, to take control of the defense and investigation of such lawsuit or
action and to employ and engage attorneys of its own choice to handle and defend
the same, at the indemnifying party's cost, risk and expense provided that the
indemnifying party and its counsel shall proceed with diligence and in good
faith with respect thereto. The indemnified party shall cooperate in all
reasonable respects with the indemnifying party and such attorneys in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom; provided, however, that the indemnified party may, at its own
cost, participate in the investigation, trial and defense of such lawsuit or
action and any appeal arising therefrom. VIII ARTICLE MISCELLANEOUS
8.1 Termination.
(a) Right of Termination Without Breach. This Agreement
may be terminated without further liability of any party at any time prior to
the Closing:
(i) By mutual written agreement of the parties; or
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(ii) By either Buyer or Seller if the Closing shall
not have occurred on or before June 30, 1998, provided the terminating
party has not, through breach of a representation, warranty or covenant,
prevented the Closing from occurring on or before such date.
(b) Termination for Breach.
(i) Termination by Buyer. If there has been a
material breach by Seller or the Company of any of their agreements,
representations or warranties contained in this Agreement which has not
been waived in writing by Buyer, then Buyer may, by written notice to
Seller at any time prior to the Closing that such breach is continuing,
terminate this Agreement with the effect set forth in Section 8.1(b)(iii)
hereof.
(ii) Termination by Seller. If there has been a
material breach by Buyer or ITEX of any of their agreements,
representations or warranties contained in this Agreement which has not
been waived in writing by Seller, then Seller may, by written notice to
Buyer at any time prior to the Closing that such breach is continuing,
terminate this Agreement with the effect set forth in Section
8.1(b)(iii).
(iii) Effect of Termination. Termination of this
Agreement pursuant to this Section 8.1 shall not in any way terminate,
limit or restrict the rights and remedies of any party hereto against any
other party which has breached or failed to perform any of the
representations, warranties, covenants, or agreements of this Agreement
prior to termination hereof.
8.2 Waiver; Remedies Cumulative; Specific Performance. Seller
(including the Company) or Buyer (including ITEX) may (a) extend the time for
the performance of any of the obligations or other acts of the other, (b) waive
any inaccuracies in the representations and warranties of the other contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements of the other or satisfaction of any of the conditions
to its obligations contained herein. Any extension or waiver made pursuant to
this Section 8.2 must be by an instrument in writing signed on behalf of the
party granting the extension or waiver. No failure or delay on the part of any
party in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to any
party hereto at law, in equity or otherwise. Seller hereby stipulates that the
remedies at law of Buyer in the event of any default by Seller in the
performance of his obligations under this Agreement are not and will not be
adequate, and that the same may be specifically enforced.
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8.3 Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors,
legal representatives and assigns. This Agreement shall not be assignable by
Seller without the prior written consent of Buyer. All the rights and
obligations of Buyer and the Company pursuant to this Agreement, including,
without limitation, the Shares, other shares of the capital stock of the Company
owned by Buyer, and any or all assets of the Company, may be freely sold,
assigned or transferred by Buyer or the Company to a third party at any time
following the Closing, including, without limitation, through a merger of the
Company into Buyer, ITEX or another subsidiary of ITEX.
8.4 Schedules. The Schedules are a part of this Agreement as if
fully set forth herein. Buyer and Seller agree that Schedules 2.10(a), 2.10(b),
2.12(b), 2.14(a), 2.14(b), 2.14(c), 2.15, 2.17, 2.18, 4.3(f), and 4.3(g) can be
prepared after Closing in order to facilitate consummation of the transactions
contemplated by this Agreement prior to June 30, 1998. All other Schedules
called for by this Agreement shall be attached hereto prior to the Closing.
8.5 Disclosures and Announcements. Both the timing and the content
of all disclosures to third parties and public announcements concerning the
transactions provided for in this Agreement by either Seller or the Company, on
the one hand, or Buyer or ITEX, on the other hand, shall be subject to the
approval of the other in all essential respects, except that Seller's or the
Company's approval shall not be required as to any announcements or filings that
ITEX may be required to make under applicable laws or regulations.
8.6 Expenses. Seller agrees that all fees and expenses incurred by
Seller in connection with this Agreement shall be borne by Seller including,
without limitation, all fees of counsel and accountants; and Buyer agrees that
all fees and expenses incurred by it in connection with this Agreement shall be
borne by it, including, without limitation, all fees of counsel and accountants.
8.7 Survival. All representations, warranties, indemnities,
covenants and agreements made by the parties to this Agreement and the other
Transaction Documents shall survive the execution of this Agreement and the
Closing except to the extent expressly waived. Notwithstanding any investigation
conducted before the date of this Agreement or the Closing, or the decision of
any party to execute this Agreement or proceed to Closing, each party shall be
entitled to rely on the representations and warranties of the other party set
forth herein or in any other Transaction Document unless expressly waived. For
purposes of this Section 8.7, Seller shall be deemed one party and Buyer and
ITEX shall together be deemed the other party.
8.8 Interpretation. No provision of this Agreement or any other
Transaction Document shall be interpreted or construed against any party because
that party or its legal representative drafted such provision. The titles of the
paragraphs of this Agreement
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and other Transaction Documents are for convenience of reference only and are
not to be considered in construing this Agreement or the relevant Transaction
Documents, unless the context otherwise requires or as otherwise expressly
provided; (a) all defined terms shall include both the singular and the plural
forms thereof; (b) reference to any gender shall include all other genders; (c)
all references to words such as "herein", "hereof", and the like shall refer to
this Agreement as a whole and not to any particular Article or Section within
this Agreement; (d) the term "include" means "include without limitation"; and
(e) the term "or" is intended to include the term "and/or".
8.9 Severability. If any term, covenant or condition of this
Agreement, or the application of such term, covenant or condition to any party
or circumstance shall be found by a court of competent jurisdiction to be, to
any extent, invalid or unenforceable, the remainder of this Agreement and the
application of such term, covenant, or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition shall be valid and
enforced to the fullest extent permitted by law. Upon determination that any
such term is invalid, illegal or unenforceable, the parties hereto shall amend
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner.
8.10 Notice. All notices, requests, demands and other
communications hereunder shall be given in writing and shall be: (a) personally
delivered; (b) sent by telecopier, facsimile transmission or other electronic
means of transmitting written documents; or (c) sent to the parties at their
respective addresses indicated herein by private overnight courier service. The
respective addresses and telephone numbers to be used for all such notices,
demands or requests are as follows:
If to Buyer or ITEX: IME, Inc.
One Lincoln Center, Suite 370 10300 ▇.▇.
▇▇▇▇▇▇▇▇▇ Road Portland, Oregon 97223
Attn: President Personal & Confidential
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Miller, Nash, Wiener, Hager & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Seller: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile:
If to BXI or Company: BXI Trade Exchange, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Stoel Rives LLP
Suite 2300
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If personally delivered, such communication shall be deemed
delivered upon actual receipt; if electronically transmitted, such communication
shall be deemed delivered the next business day after transmission (and the
sender shall bear the burden of proof of delivery); if sent by overnight courier
pursuant to this paragraph, such communication shall be deemed delivered upon
receipt. Any party to this Agreement may change its address for the purposes of
this Agreement by giving notice thereof in accordance with this section.
8.11 Amendment; Governing Law. This Agreement may not be modified
or terminated orally, and shall be construed in accordance with and governed by
the laws of the State of Oregon, without regard to laws relating to conflicts of
law. The sole venue for any disputes arising under this Agreement shall be the
Multnomah County (Oregon) Circuit Court.
8.12 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all, of the parties
hereto.
8.13 Precedence of Agreement. In the event that the provisions of
the Settlement Agreement and the provisions of this Agreement are inconsistent,
the provisions of this Agreement shall control.
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8.14 Further Assurances. Both before and after the Closing, each
party will cooperate in good faith with the others and will take all appropriate
action and execute all documents, instruments, or conveyances of any kind that
may be reasonably necessary or desirable to carry out any of the Transactions.
8.15 Loss Carryforwards. It is understood and agreed by the
parties hereto that BXI will retain all net operating loss carryforwards
generated by BXI prior December 31, 1997, and that all net operating loss
carryforwards of BEI generated by BEI will be retained by BEI.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement effective as of the date first above written.
SELLER: BUYER:
/s/▇▇▇▇ ▇▇▇▇▇▇
-------------------------------- IME, INC., a
▇▇▇▇ ▇▇▇▇▇▇ Nevada corporation
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
BUSINESS EXCHANGE ITEX CORPORATION,
INTERNATIONAL CORP., a Nevada Corporation
a Nevada corporation
By:/s/▇▇▇▇ ▇▇▇▇▇▇ By:/s/▇▇▇▇▇▇ ▇.▇▇▇▇▇▇
----------------------------- -----------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President President
BXI TRADE EXCHANGE, INC.,
a California corporation
By:/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President
[The undersigned, being the spouse of Seller named in the foregoing Stock
Purchase Agreement, hereby relinquishes all right, title, and interest,
including, without limitation, any community property rights under Nevada law,
to the Shares (as defined in such Agreement) and hereby consents and agrees to
the transfer of such Shares pursuant to such Agreement.]
/s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------- -----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Wife of ▇▇▇▇ ▇▇▇▇▇▇ [ ]
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SCHEDULES
Schedule 2.1(f) Officers and Directors; Bank Accounts; Powers of Attorney
Schedule 2.8 Liens on Property and Assets; Nonheld Tangible Assets of the
Business
Schedule 2.10(a) Real Property
Schedule 2.10(b) Real Property Leases
Schedule 2.11 Legal Proceedings
Schedule 2.12(b) Permits
Schedule 2.14(a) Leases of Personal Property
Schedule 2.14(b) Purchase Commitments
Schedule 2.14(c) Broker Agreements
Schedule 2.14(g) Loan Agreements
Schedule 2.14(j) Other Material Contracts
Schedule 2.15 Employee Benefit Plans
Schedule 2.17 Intellectual Property Rights
Schedule 2.18 Tax Carryforwards
Schedule 4.1 Personal Property to be Transferred to BXI
Schedule 4.3(f) Oral Agreements with Brokers
Schedule 4.3(g) Broker Advances and Loans
EXHIBITS
Exhibit A Consulting and Noncompetition Agreement with ▇▇▇▇ ▇▇▇▇▇▇
Exhibit B Employment Agreement with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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