ASSET PURCHASE AGREEMENT dated as of June 30, 2008
dated
as
of June 30, 2008
This
ASSET PURCHASE AGREEMENT (this "Agreement"), is made and entered into effective
as of June 30, 2008 (the “Effective Date”), by and between * (“Purchaser”),
and * (“Seller”), a Delaware corporation.
RECITALS:
WHEREAS,
Seller is engaged in the business of (i) providing merchant processing and
customer services to assist merchants in point of sale (“POS”) transactions and
solutions, (ii) development and marketing of software that assists restaurants
in taking orders and collecting payment online, (iii) providing loans secured
by
revenues from merchant transactions, (iv) selling prepaid debit cards, (v)
assisting companies in the acceptance of electronic checks and use of ACH
transactions, (v) providing gateways for merchant transactions over the
internet, including information and guaranty programs relating to chargebacks
(collectively, the "Business"); and
WHEREAS,
Seller desires to sell, transfer and assign to Purchaser, and Purchaser desires
to purchase and acquire from Seller, certain assets of Seller relating to the
operation of the Business, and in connection therewith, Purchaser has agreed
to
assume certain contractual obligations of Seller relating to the Business,
all
on the terms set forth herein;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
in
this Agreement, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
SALE
OF
ASSETS AND CLOSING
1.01 Assets
Transferred.
On the
terms and subject to the conditions set forth in this Agreement, Seller hereby
sells, transfers, conveys, assigns and delivers to Purchaser, and Purchaser
hereby purchases, for the purchase price set forth below, the following assets
of Seller (the "Assets"), free and clear of all Liens other than Permitted
Liens:
(a) Contracts.
(i) All
contracts between Seller and backend processing companies (the “Processors”),
including without limitation, sales agent application and agreements, sales
representative agreements, or other similar agreements with Priority,
Cornerstone, Cynergy, Elavon, CPM Gateway, and others (“Sales Rep Agreements”);
(ii) Contract
rights to the phone numbers listed in Exhibit 1.01(a)(ii) attached
hereto;
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(iii) All
other
contracts to which Selller is a party and which are utilized in the conduct
of
the Business, which contracts are listed in 1.01(a)(iii) attached hereto
;
(iv) Leases
for the real property located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the “Leases”).
(b) Intellectual
Property.
The
following intellectual property assets (the “Intellectual Property Assets”):
(i) Trademarks/Tradenames.
All
Intellectual Property used in the conduct of the Business (including without
limitation all rights in the name “GVPN” and “*”) on a worldwide
basis;
(ii) Licenses.
Software Licenses for all software residing on the computers and servers
included in the Assets, or used by Seller in connection with the
Business;
(iii) Software. All
right, title and interest in and to proprietary software programs used by
Seller, including all intellectual property rights therein, including without
limitation copyright, and all documentation relating thereto, including without
limitation, object and source code and user and training manuals;
(iv) Website.
Rights
to the domain names set forth in Exhibit 1.01(b)(iv) (the “Domain Names”) and
all content residing thereon, including without limitation, the object and
source code thereto and all intellectual property rights, including without
limitation copyright, therein; and
(v) Marketing
Materials.
All
right, title and interest in and to the marketing materials used by Seller
in
connection with the Business, including all intellectual property rights
therein, including without limitation copyright.
(c) Books
and Records.
All
Books and Records used or held for use in the conduct of the Business or
otherwise relating to the Assets (the “Business Books and
Records”);
(d) Tangible
Assets.
The
computers and computer servers listed in Exhibit 1.01(d).
(e) Other
Assets and Properties.
All
other assets and properties of Seller used or held for use in connection with
the Business, exclusive of cash, bank accounts and receivables, existing as
of
the Effective Date.
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1.02 Liabilities.
(a) Assumed
Liabilities.
Purchaser hereby assumes and agrees to pay, perform and discharge when due
obligations under the Sales Rep Agreements and the Leases, but only to the
extent arising or accruing after the date hereof (the “Assumed Liabilities”).
Except as set forth in the immediately preceding sentence, Purchaser is not
assuming, and shall not be deemed to have assumed, any liabilities or
obligations of Seller, and Seller agrees that Seller shall remain liable to
pay,
perform and discharge, all liabilities and obligations of Seller, in a timely
manner.
(b) The
parties hereto expressly acknowledge and agree that, without limiting the
generality of Section 1.02(a) above, Purchaser does not adopt or assume, and
shall have no obligation to adopt or assume, and shall have no liability
whatsoever to Seller, any employees of Seller, or any other person, with respect
to any collective bargaining agreement or any employee benefit plan currently
maintained by, or contributed to, by Seller, or by which Seller is or ever
has
been bound, for the benefit of employees, retirees, dependents, spouses,
directors, independent contractors or other beneficiaries of Seller
(collectively, the “Benefited Persons”), whether arrived at through collective
bargaining or otherwise.
1.03 Purchase
Price.
The
total purchase price to be paid by Purchaser to Seller for the Assets (the
“Purchase Price”) shall consist of, and be payable, as follows:
(a) Two
Hundred Fifty Thousand Dollars ($250,000.00), paid contemporaneously
herewith;
(b) Two
Hundred Fifty Thousand Dollars ($250,000.00), to be paid on or prior to March
31, 2009;
(c) Two
Hundred Fifty Thousand Dollars ($250,000), to be paid on or prior to June 30,
2009;
(d) Two
Hundred Fifty Thousand Dollars ($250,000), to be paid on or prior to June 30,
2010; and
(e) Three
Million shares of common stock of FNDS3000 Corp. (the “Parent Shares”), the
parent company of Purchaser (“Parent”).
Notwithstanding
the foregoing or anything in this Agreement to the contrary, Purchaser shall
not
be required to make any of the payments under Section 1.03(b), 1.03(c) or
1.03(d) unless and until all UCC financing statements that are outstanding
against the assets of Seller as of the Effective Date have been
terminated.
1.04
Earnout.
In
addition to the Purchase Price set forth above, as additional purchase price,
the Seller shall be entitled to receive up to an additional 2 million Parent
Shares, subject to the achievement of certain financial performance goals
(“Milestones”) of Purchaser as follows:
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(i) Within
thirty days after Purchaser achieves monthly Gross Margin (as defined below)
of
$62,500 in three consecutive calendar months (excluding the months of December
and January), Purchaser shall deliver to Seller an additional five hundred
thousand Parent Shares;
(ii)
Within
thirty days after Purchaser achieves monthly Gross Margin of $80,000 in three
consecutive calendar months (excluding December and January), the Purchaser
shall deliver to Seller an additional one million five hundred thousand Parent
Shares.
(iii) For
purposes of determining whether a Milestone has been achieved, “Gross Margin”
shall mean the gross revenues of Purchaser less (i) the direct cost of sales,
and less (ii) the total compensation earned by ▇▇▇▇▇ ▇▇▇▇▇▇▇ in each case,
as
determined in accordance with generally accepted accounting principles (“GAAP”),
applied on a consistent bases by Purchaser.
1.05 Allocation
of Purchase Price.
The
Purchase Price shall be allocated as set forth in Exhibit 1.05. Each party
hereto agrees (i) to complete jointly and to file separately Form 8594 with
its
Federal income Tax Return consistent with such allocation and (ii) that no
party
will take a position on any income, transfer or gains tax return, before any
governmental or regulatory authority charged with the collection of any such
tax
or in any judicial proceeding, that is in any manner inconsistent with the
terms
of such allocation without the consent of the other party.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF SELLER
Seller
represents and warrants to Purchaser as follows, subject to the exceptions
specifically disclosed in the Disclosure Schedule attached hereto, the sections
of which correspond to the Sections of this Agreement.
2.01 Organization
of Seller.
Seller
is a corporation duly organized, validly existing and in good standing under
the
Laws of the state of [Georgia], and has full corporate power and authority
to
conduct the Business as and to the extent now conducted and to own, use and
lease its assets and properties used in the Business. Seller is duly qualified,
licensed or admitted to do business and is in good standing in those
jurisdictions specified in Section
2.01 of the Disclosure Schedule,
which
are the only jurisdictions in which the ownership, use or leasing of its assets
and properties, or the conduct or nature of the Business, makes such
qualification, licensing or admission necessary.
2.02 Authority;
Execution.
Seller
has full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery by Seller of this Agreement
and
the Operative Agreements to which it is a party, and the performance by Seller
of its obligations hereunder and thereunder, have been duly and validly
authorized by all requisite action. This Agreement has been duly and validly
executed and delivered by Seller and constitutes, and upon the execution and
delivery by Seller of the Operative Agreements to which it is a party, such
Operative Agreements, assuming the due authorization, execution and delivery
of
this Agreement and the Operative Agreements by Purchaser, will constitute legal,
valid and binding obligations of Seller enforceable against it in accordance
with their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to creditors rights and to general principles of
equity.
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2.03 No
Conflicts.
The
execution and delivery by Seller of this Agreement does not, and the execution
and delivery by Seller of the Operative Agreements to which it is a party,
the
performance by Seller of its obligations under this Agreement and such Operative
Agreements and the consummation of the transactions contemplated hereby and
thereby will not:
(a) conflict
with or result in a violation or breach of any of the terms, conditions or
provisions of the articles or certificate of incorporation or bylaws of
Seller;
(b) conflict
with or result in a material violation or breach of any term or provision of
any
Law or Order applicable to Seller or any of the Assets; or
(c) except
as
disclosed in Section
2.03 of the Disclosure Schedule,
(i)
conflict with or result in a material violation or breach of, (ii) constitute
(with or without notice or lapse of time or both) a default under, (iii) require
Seller to obtain any consent, approval or action of, make any filing with or
give any notice to any Person as a result or under the terms of, or (iv) result
in the creation or imposition of any Lien upon Seller or any of the Assets
under, any Contract or License to which Seller is a party or by which any of
the
Assets is bound.
2.04 Governmental
Approvals and Filings.
No
consent, approval or action of, filing with or notice to any Governmental or
Regulatory Authority on the part of Seller is required in connection with the
execution, delivery and performance of this Agreement or any of the Operative
Agreements to which it is a party or the consummation of the transactions
contemplated hereby or thereby.
2.05 Financial
Statements.
Section
2.05 of the Disclosure Schedule
sets
forth financial statements of the Business for the calendar years ended December
31, 2007 and December 31, 2006 (“Financial Statements”). The Financial
Statements are true, correct and complete in all respects and were prepared
in
accordance with GAAP consistently applied throughout the periods indicated
(except to the extent that certain notes and supplemental information otherwise
required in accordance with GAAP are not included in the Financial Statements,
the effect of which will not, individually or in the aggregate, be materially
adverse). Section 2.05 of the Disclosure Schedule sets forth certain financial
information regarding the results of operations for the Business during 2008
(the “Interim Financial Information”). The Interim Financial Information is
true, correct and complete. The Financial Statements and the Interim Financial
Information were prepared from the books and records of Seller and fairly and
accurately set forth the results of operations and financial position of the
Business, for the periods indicated.
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2.06 Absence
of Changes.
Except
for the execution and delivery of this Agreement, since December 31, 2007,
there
has not been any material adverse change, or any event or development which,
individually or together with other such events, could reasonably be expected
to
result in a material adverse change, in the Condition of the Business.
2.07 No
Undisclosed Liabilities.
Except
as reflected or reserved against in the December 31, 2007 balance sheet of
the
Business or as disclosed in Section 2.07
of the Disclosure Schedule,
there
are no Liabilities against, relating to or affecting the Business or any of
the
Assets, other than Liabilities incurred in the ordinary course of business
consistent with past practice which in the aggregate are not material to the
Condition of the Business.
2.08 Taxes.
(a) Seller
has timely paid all Taxes, and all interest and penalties due thereon and
payable by it for the Pre-Closing Tax Period which will have been required
to be
paid on or prior to the Effective Date, the non-payment of which would result
in
a Lien on any Asset, would otherwise adversely affect the Business or would
result in Purchaser becoming liable or responsible therefore.
(b) Seller
has established, in accordance with generally accepted accounting principles
applied on a basis consistent with that of preceding periods, adequate reserves
for the payment of, and will timely pay all Tax liabilities, assessments,
interest and penalties which arise from or with respect to the Assets or the
operation of the Business and are incurred in or attributable to the Pre-Closing
Tax Period, the non-payment of which would result in a Lien on any Asset, would
otherwise adversely affect the Business or would result in Purchaser becoming
liable therefore.
(c) Seller
has filed on a timely basis (or has received a valid extension to file) with
the
appropriate Tax Authorities all Tax Returns applicable to the Business or the
Assets, and all such returns are true, correct, and complete in all
respects.
2.09 Legal
Proceedings.
Except
as disclosed in Section 2.09
of the Disclosure Schedule
(with
paragraph references corresponding to those set forth below):
(a) there
are
no Actions or Proceedings pending or, to the Knowledge of Seller, threatened
against, relating to or affecting Seller with respect to the Business or any
of
the Assets; and
(b) there
are
no Orders outstanding against Seller with respect to the Business or the
Assets.
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2.10 Compliance
With Laws and Orders.
Except
as disclosed in Section
2.10 of the Disclosure Schedule,
Seller
is not, nor has it at any time within the last three (3) years been, nor has
it
received any notice that it is or has at any time within the last three (3)
years been, in violation of or in default under any Law or Order applicable
to
the Business or the Assets.
2.11 Employee
Benefits; ERISA.
Seller
has no liability under, nor is it subject to any Lien, restriction or other
adverse right relating to, any “employee benefit plan” (as defined in Section
3(3) of ERISA), including any multiemployer plans (as defined in Section 3(37)
of ERISA) or any other bonus, deferred compensation, severance pay, pension,
profit-sharing, retirement, insurance stock purchase, stock option or other
fringe benefit plan, arrangement or practice maintained, or contributed to,
by
Seller for the benefit of any current or former employees, officers or directors
(collectively, the “Benefit Plans”) (i) that would affect in any manner
whatsoever Purchaser’s right, title and interest in, or right to use or enjoy
(free and clear of any Lien, other than Permitted Liens), the Assets or (ii)
that would result in the assumption by or imposition on Purchaser of any
liability. All Benefit Plans of Seller are set forth in Section 2.11 of the
Disclosure Schedule.
2.12 Intellectual
Property.
(a) Section
2.12(a) of the Disclosure Schedule
sets
forth a list of all patents, patent applications, copyright registrations (and
applications therefore), trademark and trade name registrations (and
applications therefore), Internet domain names and trade names owned by Seller
and used in the Business. All registrations and applications to register the
Intellectual Property Assets in each of the countries in which any of the same
is registered are valid and subsisting in all respects and have been properly
maintained in all respects. Section
2.12(a) of the Disclosure Schedule
also
sets forth a list of any unregistered trademarks, trade names, service marks,
brand names, logos or other identifiers for the products of Seller or otherwise
used in the Business.
(b) Section
2.12(b) of the Disclosure Schedule
sets
forth a list of all patents, software and other technology used in the Business
and for which the Seller does not own all right, title and interest
(collectively, the “Third Party Technology”), and all license agreements or
other contracts pursuant to which the Seller has the right to use the Third
Party Technology (the “Third Party Licenses”). Seller has the lawful right to
use (free of any material restriction not expressly set forth in the Third
Party
Licenses) all Third Party Technology that is incorporated or used in the
Business, and no royalties or other compensation is payable for the right to
use
such Third Party Technology other than as expressly set forth in the Third
Party
Licenses. Seller has not received notice that any party to any such license
intends to cancel, terminate or refuse to renew (if renewable) such license
or
to exercise or decline to exercise any option or right thereunder, and Seller
has used the Third Party Technology in accordance with all of the terms of
the
Third Party Licenses. Seller is not in breach of any Third Party
Licenses.
(c) All
the
Intellectual Property Assets are owned by Seller free and clear of all Liens,
other than Permitted Liens. Seller has not received any notice or claim (whether
written, oral or otherwise) challenging Seller’s ownership or rights in the
Intellectual Property Assets or claiming that any other Person has any legal
or
beneficial ownership with respect thereto or challenging the validity or
enforceability of the Intellectual Property Assets.
8
(d) Except
as
set forth in Section
2.12(d) of the Disclosure Schedule,
Seller
has obtained an enforceable written assignment of all right, title and interest
in and to each item of the Intellectual Property Assets owned by Seller from
each Person participating in the discovery, development or creation of such
item
and has provided to Purchaser true and correct copies of each such assignment.
Except as otherwise provided in Section
2.12(d) of the Disclosure Schedule,
Seller
has no obligation to compensate, or to obtain the consent of, any third party
for the use of any item of the Intellectual Property Assets. All employees,
independent contractors, or other persons who have had access to or participated
in the development in any of the Intellectual Property Assets owned by Seller
have signed appropriate confidentiality and non-disclosure agreements and,
in
the case of independent contractors, appropriate work for hire agreements and
assignments, sufficient to protect Seller’s ownership rights in the Intellectual
Property Assets and the unauthorized use or disclosure of same.
(e) Neither
Seller’s operation of the Business prior to Effective Date nor the Intellectual
Property Assets infringe, violate or interfere with or constitute a
misappropriation of any right, title or interest (including, without limitation,
any patent, copyright, trademark or trade secret right) held by any other
Person. Seller has not received any notice or claim (whether written, oral
or
otherwise) regarding any infringement, misappropriation, misuse, abuse or other
interference with any third party intellectual property or proprietary rights
(including, without limitation, infringement of any patent, copyright, trademark
or trade secret right of any third party) by Seller’s operation of the Business
or the Intellectual Property Assets.
(f) There
is
neither pending nor, to the Knowledge of Seller, threatened any suit, action,
claim, arbitration, grievance, litigation, administrative or legal or other
proceeding, or investigation, against Seller or its licensors contesting the
validity of, or Seller’s right to use, any of the Intellectual Property
Assets.
(g) To
the
Knowledge of Seller, no other Person is infringing or misappropriating the
Intellectual Property Assets.
(h) The
Intellectual Property Assets contain all of the Intellectual Property used
or
held for use in, and necessary for the conduct of, the Business as conducted
by
Seller as of the EffectiveDate.
2.13 Contracts.
(a) Section
2.13(a) of the Disclosure Schedule
(with
paragraph references corresponding to those set forth below) contains a true
and
complete list of each of the following Contracts or other arrangements related
to the Business (true and complete copies or, if none, reasonably complete
and
accurate written descriptions of which, together with all amendments and
supplements thereto and all waivers of any terms thereof, have been delivered
to
Purchaser prior to the execution of this Agreement) to which Seller is a party
and by which any of the Assets is bound:
9
(i) (A)
all
Contracts (excluding Benefit Plans) providing for a commitment of employment
or
consultation services for a specified or unspecified term to, or otherwise
relating to employment or the termination of employment of, any Employee, the
name, position and rate of compensation of each Employee party to such a
Contract and the expiration date of each such Contract; and (B) any written
or
unwritten representations, commitments, promises, communications or courses
of
conduct (excluding Benefit Plans) involving an obligation of Seller to make
payments, other than with respect to salary in the ordinary course of business,
to any Employee;
(ii) all
Contracts with any Person containing any provision or covenant prohibiting
or
limiting the ability of Seller to engage in any business activity or compete
with any Person in connection with the Business or prohibiting or limiting
the
ability of any Person to compete with Seller in connection with the
Business;
(iii) all
partnership, joint venture or other similar Contracts with any Person in
connection with the Business;
(iv) all
Contracts with licensors, licensees, sales agencies or franchises with whom
Seller deals in connection with the Business;
(v) all
Sales
Rep Agreements (together with a list of the merchant contracts entered into
with
respect to each such agreement);
(vi) all
Contracts between or among Seller, on the one hand, and any officer, director,
Affiliate or Associate of Seller or any Associate of any such officer, director
or Affiliate, on the other hand;
(vii) all
collective bargaining or similar labor Contracts;
(viii) all
other
Contracts with respect to the Business that (A) involve the payment or potential
payment, pursuant to the terms of any such Contract, by or to Seller of more
than $10,000 annually and (B) cannot be terminated within thirty (30) days
after
giving notice of termination without resulting in any material cost or penalty
to Seller.
(b) Each
Contract required to be disclosed in Section 2.13(a)
of the Disclosure Schedule
is in
full force and effect and constitutes a legal, valid and binding agreement,
enforceable in accordance with its terms, of each party thereto; and Seller
nor,
to the Knowledge of Seller, any other party to such Contract is, or has received
notice that it is, in violation or breach of or default under any such Contract
(or with notice or lapse of time or both, would be in violation or breach of
or
default under any such Contract) in any respect.
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(c) There
are
at least 900 merchant contracts pursuant to which Seller obtains revenues under
the Sales Rep Agreements. Each such merchant contract is in full force and
effect as of the date hereof.
2.14 Licenses.
Section
2.14 of the Disclosure Schedule
contains
a true and complete list of all material Licenses used or held for use in the
Business (and all pending applications for any such Licenses), setting forth
the
grantor, the grantee, the function and the expiration and renewal date of each.
Prior to the execution of this Agreement, Seller has delivered or made available
to Purchaser true and complete copies of all such Licenses. Except as disclosed
in Section
2.17 of the Disclosure Schedule:
(a)
Seller owns or validly holds all Licenses that are material to the Business;
(b)
each License is valid, binding and in full force and effect; (c) Seller is
not,
nor has it received any notice that it is, in default (or with the giving of
notice or lapse of time or both, would be in default) under any License; and
(d)
as of the Effective Date, all such Licenses will be validly assigned to
Purchaser.
2.15 Affiliate
Transactions.
Except
as disclosed in Section
2.15 of the Disclosure Schedule,
no
officer, director, Affiliate or Associate of Seller or any Associate of any
such
officer, director or Affiliate (a) has any ownership interest, directly or
indirectly, in any competitor, supplier or customer of Seller, (b) has any
outstanding loan to or from Seller, or (c) is a party to or has any interest
in
any Contract with Seller.
2.16 Employees;
Labor Relations.
(a) Section
2.16(a) of the Disclosure Schedule
contains
a list of the name of each Employee, together with such Employee’s position or
function, annual base salary or wages and any incentive or bonus arrangement
with respect to such Employee in effect as of the date hereof. Each Employee
has
executed a nondisclosure agreement in the form provided to Purchaser. To the
Knowledge of Seller, no Employee is in violation of any agreement relating
to
the relationship of such Employee with Seller.
(b) Except
as
disclosed in Section
2.16(b) of the Disclosure Schedule,
(i) no
Employee is presently a member of a collective bargaining unit and, to the
Knowledge of Seller, there are no threatened or contemplated attempts to
organize for collective bargaining purposes any of the Employees, and (ii)
no
unfair labor practice complaint or sex, age, race or other discrimination claim
has been brought against Seller with respect to the conduct of the Business
before the National Labor Relations Board, the Equal Employment Opportunity
Commission or any other Governmental or Regulatory Authority. Seller is in
compliance with all applicable Laws relating to the employment of labor,
including, without limitation those relating to wages, hours and collective
bargaining with respect to the Employees.
2.17 Investigation
by Seller; Parent Shares.
The
Seller acknowledges that the Seller and its representatives have had an
opportunity to ask questions of and receive answers from the Parent, or persons
acting on the Parent’s behalf, concerning the financial condition and
performance of the Parent and to view the books and records of the Parent,
and
that such inquiry and review were completed to the Seller’s satisfaction. . The
Seller’s representatives have such knowledge and experience in financial,
securities, investment and other business maters that they are capable of
evaluating the merits and risks of the acquisition of the Parent Shares and
are
able to adequately protect the interest of the Seller. The Seller can bear
the
risks of the investment in the Parent Shares for an indefinite period. The
Parent Shares are being acquired for the Seller’s own account for investment and
not with a view to distribution or resale and Seller has no immediate plans
to
sell, pledge, transfer or hypothecate the Parent Shares. Seller acknowledges
that Seller will be an “affiliate” of Parent, as defined by the Securities Act
of 1933, and that Seller is aware of the requirements and restrictions
applicable to Seller as a result of such status. Seller agrees that it will
comply with all securities laws, rules and regulations relating to its holding,
ownership and sale of the Parent Shares.
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2.18 Title;
Condition of Assets.
Seller
has good and marketable title to the Assets free and clear of all Liens. The
Assets are in good working condition, normal wear and tear excepted, and are
suitable for their intended purposes.
2.19 Entire
Business.
The
sale of the Assets by Seller to Purchaser pursuant to this Agreement will
effectively convey to Purchaser the entire Business and all of the tangible
and
intangible assets and property used by Seller (whether owned, leased or held
under license by Seller, by any of Seller’s Affiliates or Associates or by
others) in connection with the conduct of the Business as heretofore conducted
by Seller, other than cash, bank accounts and receivables existing as of the
Effective Date. There are no shared facilities or services which are used in
connection with the Business and any other business or other operations of
Seller or any of Seller’ respective Affiliates or Associates.
2.20 Disclosure.
No
representation or warranty contained in this Agreement, and no statement
contained in the Disclosure Schedule (including without limitation the Financial
Statements) contains any untrue statement of a material fact or omits to state
a
material fact necessary in order to make the statements herein or therein,
in
the light of the circumstances under which they were made, not
misleading.
2.21 Brokers.
All
negotiations relative to this Agreement and the transactions contemplated hereby
have been carried out by Seller directly with Purchaser without the intervention
of any Person on behalf of Seller in a manner as to give rise to any valid
claim
by any Person against Purchaser for a finder’s fee, brokerage commission or
similar payment.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
hereby represents and warrants to Seller as follows:
3.01 Organization,
Standing and Power.
Purchaser is a corporation duly organized, validly existing and in good standing
under the Laws of the jurisdiction of its incorporation.
12
3.02 Authority.
The
execution and delivery by Purchaser of this Agreement and the Operative
Agreements to which it is a party, and the performance by Purchaser of its
obligations hereunder and thereunder, have been duly and validly authorized
by
the Board of Directors of Purchaser, no other corporate action on the part
of
Purchaser being necessary. This Agreement has been duly and validly executed
and
delivered by Purchaser and, assuming the due authorization, execution and
delivery of this Agreement and the Operative Agreements by Seller, constitutes,
and upon the execution and delivery by Purchaser of the Operative Agreements
to
which it is a party, such Operative Agreements will constitute, legal, valid
and
binding obligations of Purchaser enforceable against Purchaser in accordance
with their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to creditors rights and to general principles of equity.
3.03 No
Conflicts.
The
execution and delivery by Purchaser of this Agreement does not, and the
execution and delivery by Purchaser of the Operative Agreements to which it
is a
party, the performance by Purchaser of its obligations under this Agreement
and
such Operative Agreements and the consummation of the transactions contemplated
hereby and thereby will not: (a) conflict with or result in a violation or
breach of any of the terms, conditions or provisions of the articles or
certificate of incorporation or by-laws of Purchaser; or (b) conflict with
or
result in a material violation or breach of any term or provision of any Law
or
Order applicable to Purchaser or any of its assets and properties.
3.04 Governmental
Approvals and Filings.
No
consent, approval or action of, filing with or notice to any Governmental or
Regulatory Authority on the part of Purchaser is required in connection with
the
execution, delivery and performance of this Agreement or the Operative
Agreements to which it is a party or the consummation of the transactions
contemplated hereby or thereby.
3.05 Legal
Proceedings.
There
are no Actions or Proceedings pending against, relating to or affecting
Purchaser or any of its assets and properties which could reasonably be expected
to result in the issuance of an Order restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement or any of the Operative Agreements.
3.06 Brokers.
All
negotiations relative to this Agreement and the transaction contemplated hereby
have been carried out by Purchaser directly with Seller without the intervention
of any Person on behalf of Purchaser in a manner as to give rise to any valid
claim by any Person against Seller for a finder’s fee, brokerage commission or
similar payment.
ARTICLE
IV
CLOSING
DELIVERIES
Contemporaneously
herewith, Seller shall deliver to Purchaser the following:
13
(i) Employment
Agreement duly executed by ▇▇▇▇▇▇ ▇▇▇▇▇▇;
(ii) Non-competition/Non-solicitation
agreement, duly executed by ▇▇▇▇▇▇ ▇▇▇▇▇▇,
(iii)
Intentionally
left blank.
(iv) Consents
executed by each Processor approving the assignment to Purchaser of each of
their respective contracts with Seller.
(v) Consent
of each landlord for the premises subject to the leases, consenting to the
assignment of the Leases to Buyer.
(vi) ▇▇▇▇
of
Sale
(vii) Copyright
Assignment, pursuant to which Seller assigns all right, title and interest
in
and to the proprietary software owned or used by Seller in the
Business.
(viii) Opinion
of Counsel to Seller
(ix) Evidence
of the approval of the transactions contemplated herein by Seller’s board of
directors and shareholders.
(x) Evidence
of the assignment to Seller of all right, title and interest in all deliverables
provided by ▇▇▇▇▇▇ ▇▇▇▇▇▇, or any of his Affiliates, to Seller, and confirmation
of Seller’s exclusive ownership interest therein.
(xi) Documents
necessary to transfer the Domain Names.
(xii) Such
other documents of transfer as may be necessary to transfer the Domain Name,
the
telephone number and any of the other Assets, and to perfect title therein
in
Purchaser.
ARTICLE
V
SURVIVAL
OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
5.01 Survival
of Representations, Warranties, Covenants and Agreements.
Notwithstanding any right of Purchaser (whether or not exercised) to investigate
the Business or any right of any party (whether or not exercised) to investigate
the accuracy of the representations and warranties of the other party contained
in this Agreement, Purchaser has the right to rely fully upon the
representations and warranties of Seller contained in this Agreement. The
representations, warranties, covenants and agreements of the parties contained
in this Agreement will survive the consummation of the Acquisition indefinitely.
14
ARTICLE
VI
INDEMNIFICATION;
POST-CLOSING OBLIGATIONS
6.01 Indemnification.
Subject
to the other Sections of this Article
VI,
Seller
shall indemnify the Purchaser Indemnified Parties in respect of, and hold each
of them harmless from and against, any and all Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to (i) any misrepresentation or breach of
warranty on the part of Seller contained in this Agreement (determined in all
cases as if the terms “material”
or
“materially”
were
not included therein); (ii) any nonfulfillment of or failure to perform any
covenant or agreement on the part of Seller contained in this Agreement; (iii)
any Loss suffered by Purchaser from the operation of the Business prior to
the
Effective Date, and (iv) any failure of Seller to transfer the Assets to
Purchaser free and clear of all Liens (other than Permitted Liens).
6.02 Method
of Asserting Claims.
All
claims for indemnification by any Indemnified Party under Section
6.01
will be
asserted and resolved as follows:
(a) In
the
event any claim or demand in respect of which an Indemnified Party might seek
indemnity under Section
6.01
is
asserted against or sought to be collected from such Indemnified Party by a
Person other than a Purchaser Indemnified Party (a “Third Party Claim”), the
Indemnified Party shall deliver a Claim Notice with reasonable promptness to
the
Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice
with reasonable promptness after the Indemnified Party receives notice of such
Third Party Claim, the Indemnifying Party will not be obligated to indemnify
the
Indemnified Party with respect to such Third Party Claim, but only to the extent
that the Indemnifying Party’s ability to defend has been irreparably prejudiced
by such failure of the Indemnified Party. The Indemnifying Party will notify
the
Indemnified Party as soon as practicable within the Dispute Period whether
the
Indemnifying Party disputes its liability to the Indemnified Party under
Section
6.02
and
whether the Indemnifying Party desires, at its sole cost and expense, to defend
the Indemnified Party against such Third Party Claim.
(i) If
the
Indemnifying Party notifies the Indemnified Party within the Dispute Period
that
the Indemnifying Party desires to defend the Indemnified Party with respect
to
the Third Party Claim pursuant to this Section
6.02(a),
then
the Indemnifying Party will have the right to defend, with counsel reasonably
satisfactory to the Indemnified Party, at the sole cost and expense of the
Indemnifying Party, such Third Party Claim by all appropriate proceedings,
which
proceedings will be reasonably and diligently prosecuted by the Indemnifying
Party to a final conclusion or will be settled at the discretion of the
Indemnifying Party (but only with the consent of the Indemnified Party in the
case of any settlement that provides for any relief other than the payment
of
monetary damages or that provides for the payment of monetary damages as to
which the Indemnified Party will not be indemnified in full by reason of
Section
6.03).
The
Indemnifying Party will have full control of such defense and proceedings,
including any compromise or settlement thereof; provided,
however,
that
the Indemnified Party may, at the sole cost and expense of the Indemnified
Party, at any time subsequent to the delivery of a Claim Notice to the
Indemnified Party and prior to the Indemnifying Party’s delivery of the notice
referred to in the first sentence of this Section
6.02(a)(i),
file
any motion, answer or other pleadings or take any other action that the
Indemnified Party reasonably believes to be necessary or appropriate to protect
its interests; and provided further,
that if
requested by the Indemnifying Party, the Indemnified Party will, at the sole
cost and expense of the Indemnifying Party, provide reasonable cooperation
to
the Indemnifying Party in contesting any Third Party Claim that the Indemnifying
Party elects to contest; and provided,
further,
that
the Indemnified Party may choose separate counsel at the sole cost and expense
of the Indemnifying Party in the event that a conflict of interest arises
between the Indemnified Party and the Indemnifying Party. The Indemnified Party
may participate in, but not control, any defense or settlement of any Third
Party Claim controlled by the Indemnifying Party pursuant to this Section
6.02(a)(i),
and
except as provided in the preceding sentence, the Indemnified Party will bear
its own costs and expenses with respect to such participation. Notwithstanding
the foregoing, the Indemnified Party may take over the control of the defense
or
settlement of a Third Party Claim at any time if it irrevocably waives its
right
to indemnity under Section
6.02
with
respect to such Third Party Claim.
15
(ii) If
the
Indemnifying Party fails to assume the defense of the Third Party Claim within
the Dispute Period or fails to prosecute reasonably and diligently or settle
the
Third Party Claim, then the Indemnified Party will have the right to defend,
at
the sole cost and expense of the Indemnifying Party, the Third Party Claim
by
all appropriate proceedings, which proceedings will be prosecuted by the
Indemnified Party in a reasonable manner and in good faith or will be settled
at
the discretion of the Indemnified Party (with the consent of the Indemnifying
Party, which consent will not be unreasonably withheld). The Indemnified Party
will have full control of such defense and proceedings, including any compromise
or settlement thereof; provided,
however,
that if
requested by the Indemnified Party, the Indemnifying Party will, at the sole
cost and expense of the Indemnifying Party, provide reasonable cooperation
to
the Indemnified Party and its counsel in contesting any Third Party Claim which
the Indemnified Party is contesting. Notwithstanding the foregoing provisions
of
this Section
6.02(a)(ii),
if the
Indemnifying Party has notified the Indemnified Party within the Dispute Period
that the Indemnifying Party disputes its liability hereunder to the Indemnified
Party with respect to such Third Party Claim and if such dispute is resolved
in
favor of the Indemnifying Party in the manner provided in clause (iii)
below, the Indemnifying Party will not be required to bear the costs and
expenses of the Indemnified Party’s defense pursuant to this Section
6.02(a)(ii)
or of
the Indemnifying Party’s participation therein at the Indemnified Party’s
request, and the Indemnified Party will reimburse the Indemnifying Party in
full
for all reasonable costs and expenses incurred by the Indemnifying Party in
connection with such litigation. The Indemnifying Party may participate in,
but
not control, any defense or settlement controlled by the Indemnified Party
pursuant to this Section
6.02(a)(ii),
and the
Indemnifying Party will bear its own costs and expenses with respect to such
participation.
16
(iii) If
the
Indemnifying Party notifies the Indemnified Party that it does not dispute
its
liability to the Indemnified Party with respect to the Third Party Claim under
Section
6.02,
or if
the Indemnifying Party fails to deliver a notice to the Indemnified Party within
the Dispute Period, then the Loss in the amount specified in the Claim Notice
will be conclusively deemed a liability of the Indemnifying Party under
Section
6.02
and the
Indemnifying Party shall pay the amount of such Loss to the Indemnified Party
on
demand. Purchaser shall have the right to set off any amounts Seller owes it
under this Section 6.02 against the Purchase Price or the Earnout.
(b) In
the
event any Indemnified Party has a claim under Section
6.02
against
any Indemnifying Party that does not involve a Third Party Claim, the
Indemnified Party shall deliver an Indemnity Notice with reasonable promptness
to the Indemnifying Party. The failure by any Indemnified Party to give the
Indemnity Notice shall not impair such party’s rights hereunder except to the
extent that an Indemnifying Party demonstrates that it has been irreparably
prejudiced thereby. If the Indemnifying Party notifies the Indemnified Party
that it does not dispute the claim described in such Indemnity Notice, or if
the
Indemnifying Party fails to deliver a notice to the Indemnified Party within
the
Dispute Period, then the Loss in the amount specified in the Indemnity Notice
will be conclusively deemed a liability of the Indemnifying Party under
Section
6.02
and the
Indemnifying Party shall pay the amount of such Loss to the Indemnified Party
on
demand.
6.03 Employee
Matters.
Purchaser shall offer employment to the Employees of Seller listed on
Schedule
6.03.
Except
as provided in the preceding sentence, Purchaser shall have no obligation to
offer employment to or employ any Employees. Purchaser shall have no liability
in respect of any Employees for salary, compensation, severance, stock options
or stock option plans, health, welfare, retirement or other benefits arising
out
of employment with Seller. Seller shall indemnify and hold Purchaser harmless
against any and all damages, losses and liabilities associated with or related
to the failure of Seller to pay any amounts due to Employees and arising out
of
their employment with a Seller.
6.04 Further
Assurances; Post-Closing Cooperation.
At any
time or from time to time after the Effective Date, at Purchaser’s request,
without further consideration, Seller shall execute and deliver to Purchaser
such other instruments of sale, transfer, conveyance, assignment and
confirmation, provide such materials and information and take such other actions
as Purchaser may reasonably deem necessary or desirable in order more
effectively to transfer, convey and assign to Purchaser, and to confirm
Purchaser’ title to, all of the Business and the Assets, and, to the full extent
permitted by Law, to put Purchaser in actual possession and operating control
of
the Assets and to assist Purchaser in exercising all rights with respect
thereto, and otherwise to cause Seller to fulfill its obligations under this
Agreement and the Operative Agreements. In addition, each Party agrees to
cooperate with the other to the extent that it receives funds that belong to
the
other. For example, in the event that Purchaser receives revenues from any
contracts assumed hereunder that relate to the period prior to the Effective
Date, it shall promptly remit such amounts to Seller. Similarly, if Seller
receives any revenues from the contracts assumed by Purchaser hereunder and
that
relate to a period subsequent to the Effective Date, Seller shall promptly
remit
such amounts to Purchaser.
17
6.05 Access
to Records.
Following the Effective Date, each party will afford the other party, its
counsel and its accountants, during normal business hours, reasonable access
to
the books, records and other data relating to the Business in its possession
with respect to periods prior to the Effective Date and the right to make copies
and extracts therefrom, to the extent that such access may be reasonably
required by the requesting party in connection with (a) the preparation of
Tax
Returns, (b) the determination or enforcement of rights and obligations under
this Agreement, (c) compliance with the requirements of any Governmental or
Regulatory Authority, (d) the determination or enforcement of the rights and
obligations of any Indemnified Party or (e) in connection with any actual or
threatened Action or Proceeding. Further each party agrees for a period
extending five (5) years after the EffectiveDate not to destroy or otherwise
dispose of any such books, records and other data unless such party shall first
offer in writing to surrender such books, records and other data to the other
party and such other party shall not agree in writing to take possession thereof
during the ten (10) day period after such offer is made. Notwithstanding
anything to the contrary contained in this Section 6.05, if the parties are
in
an adversarial relationship in litigation or arbitration, the furnishing of
information, documents or records relating to the matter in dispute shall be
subject to applicable rules relating to discovery.
6.06 Taxes.
Seller
shall assume and pay all liabilities for sales, use, transfer and other Taxes
arising from the transfer of the Assets to Purchaser.
6.07 Public
Announcements.
Neither
party hereto will issue any press release or make any other public announcement
relating to the transactions contemplated by this Agreement without the prior
consent of the other party hereto, except that a party may make any disclosure
required to be made under applicable law or stock exchange rule if such party
determines in good faith that it is necessary to do so and, if practicable,
gives prior notice to the other party.
6.08 Name
Change.
Seller
shall, within thirty (30) days after the Effective Date, change its corporate
name so that it does not contain the term “*” or any other words that could be
confusingly similar thereto. In addition, Seller agrees that, it shall not
utilize any fictitious name that contains the term “Atlas.”
6.09 Release
of Financing Statements.
Seller
agrees that it shall, promptly and, in any event within sixty (60) days
following the Effective Date, cause termination statements to be filed with
respect to all UCC financing statements that are of record in any jurisdiction
as of the Effective Date and that list Seller as the debtor.
18
ARTICLE
VII
RIGHT
OF
FIRST REFUSAL
In
the
event that Seller desires to sell any Parent Shares, it shall first offer the
right to Purchaser to purchase such shares as set forth below:
(i) Before
Disposing of any Parent Shares, Seller shall deliver to Purchaser a written
notice (the “Transfer
Notice”)
setting forth (A) Seller’s intention to Dispose of all or a portion of the
Parent Shares, and (B) the number of Parent Shares Seller proposes to Dispose
of
(the “Offered
Shares”)
(ii) Purchaser
shall have the irrevocable and exclusive option, but not the obligation, to
purchase the Parent Shares to be Disposed of for a price equal to the average
closing bid price for the Parent Shares for the five days immediately preceding
the day the Transfer Notice is delivered to Purchaser. Such option shall be
exercised by notifying Seller as to such number of the Offered Shares that
Purchaser intends to purchase, within 20 days (the “Response
Period”)
of the
delivery of the Transfer Notice to Purchaser. Failure by Purchaser to deliver
the notice required by, and within the time frame set forth in, this Article
VII
shall be deemed an election not to purchase the Offered Shares.
(iii) In
the
event that Purchaser fails to elect to purchase all of the Offered Shares within
the Response Period in accordance with Section (ii) above, or fails to close
within sixty days after the expiration of the Response Period through no fault
of Seller, the election, if any, made pursuant to said Section shall, at
Seller’s option, be null and void and of no force or effect; whereupon, Seller
may Dispose of the number of Parent Shares set forth in the Transfer Notice
within a period of 120 days following the expiration of the Response Period
(the “Third
Party Closing Date”).
If
the proposed Disposition is not completed on or before the Third Party Closing
Date, no Disposition of such shares shall be effected except pursuant to a
new
Transfer Notice and otherwise in accordance with this Article VII.
ARTICLE
VIII
DEFINITIONS
8.01 Definitions.
In
addition to terms defined elsewhere in this Agreement, the following defined
terms have the meanings indicated below:
“Acquisition”
means the purchase and sale of the Assets pursuant to this
Agreement.
“Actions
or Proceedings” means any action, suit, proceeding, arbitration or Governmental
or Regulatory Authority investigation or audit.
“Affiliate”
means any Person that directly, or indirectly through one of more
intermediaries, controls or is controlled by or is under common control with
the
Person specified. For purposes of this definition, control of a Person means
the
power, direct or indirect, to direct or cause the direction of the management
and policies of such Person whether by Contract or otherwise and, in any event
and without limitation of the previous sentence, any Person having record
ownership of ten percent (10%) or more of the voting securities of another
Person shall be deemed to control that Person.
19
“Associate”
means, with respect to any Person, any corporation or other business
organization of which such Person is an officer or partner or is the beneficial
owner, directly or indirectly, of ten percent (10%) or more of any class of
equity securities, any trust or estate in which such Person has a substantial
beneficial interest or as to which such Person serves as a trustee or in a
similar capacity and any relative or spouse of such Person, who has the same
home as such Person.
“Books
and Records” of any Person means all files, documents, instruments, papers,
books and records relating to the business, operations, condition of (financial
or other), results of operations and assets and properties of such Person,
including without limitation, budgets, pricing guidelines, ledgers, journals,
Contracts, Licenses, customer lists, computer files and programs, retrieval
programs and operating data.
“Business
Day” means a day other than Saturday, Sunday or any day on which banks located
in the state of Florida are authorized or obligated to close.
“Claim
Notice” means written notification pursuant to Section
6.02(a)
of a
Third Party Claim as to which indemnity under Section
6.01
is
sought by an Indemnified Party, enclosing a copy of all papers served, if any,
and specifying the nature of and basis for such Third Party Claim and for the
Indemnified Party’s claim against the Indemnifying Party under Section
6.01,
together with the amount or, if not then reasonably ascertainable, the estimated
amount, determined in good faith, of such Third Party Claim.
“Code”
means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
“Condition
of the Business” means the business, condition (financial or otherwise), results
of operations, assets, properties and prospects of the Business.
“Contract”
means any agreement, lease, license, evidence of Indebtedness, mortgage,
indenture, security agreement or other contract (whether written or
oral).
“Disclosure
Schedule” means the record delivered to Purchaser by Seller herewith and dated
as of the date hereof, , containing all lists, descriptions, exceptions and
other information and materials as are required to be included therein by Seller
pursuant to this Agreement.
“Dispose
of”
or
“Disposition”
or
words of similar import (as the context may require) means any transfer,
assignment, or grant of any right or interest relating thereto, whether
voluntary or involuntary, and whether for value or not, during a Person’s
lifetime or by reason of death, whether by sale, exchange, pledge, encumbrance,
gift, judicial attachment, contribution to a trust or other entity, property
settlement upon divorce, bequest or otherwise.
20
“Dispute
Period” means the period ending thirty (30) days following receipt by an
Indemnifying Party of either a Claim Notice or an Indemnity Notice.
“Employee”
means each current employee, officer or consultant of Seller engaged in the
conduct of the Business.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and
the
rules and regulations promulgated thereunder.
“GAAP”
means generally accepted accounting principles in the United
States.
“Governmental
or Regulatory Authority” means any court, tribunal, arbitrator, authority,
agency, commission, official or other instrumentality of the United States,
any
foreign country or any domestic or foreign state, county, city or other
political subdivision.
“Indebtedness”
of any Person means all obligations of such Person (i) for borrowed money,
(ii)
evidenced by notes, bonds, debentures or similar instruments, (iii) for the
deferred purchase price of goods or services (other than trade payables or
accruals incurred in the ordinary course of business), (iv) under capital leases
and (v) in the nature of guarantees of the obligations described in clauses
(i)
through (iv) above of any other Person.
“Indemnified
Party” means any Person claiming indemnification under any provision of
Article
V.
“Indemnifying
Party” means any Person against whom a claim for indemnification is being
asserted under any provision of Article
VI,
including without limitation a Person against whom a claim is asserted pursuant
to Section
6.02.
“Indemnity
Notice” means written notification pursuant to Section
6.02(b)
of a
claim for indemnity under Article
VI
by an
Indemnified Party, specifying the nature of and basis for such claim, together
with the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such claim.
“Intellectual
Property” means all patents and patent rights, trademarks and trademark rights,
trade names and trade name rights, domain names, service marks and service
▇▇▇▇
rights, service names and service name rights, brand names, inventions,
processes, methods, designs, devices, tools, specifications, techniques,
algorithms, formulae, improvements, copyrights and copyright rights, trade
dress, business and product names, logos, slogans, trade secrets, industrial
models, computer programs, software (whether in source or object code) and
related documentation, technical information, manufacturing, engineering and
technical drawings, know-how and all pending applications for and registrations
of patents, trademarks, service marks and copyrights.
“Knowledge”
means in the case of an individual that he will be deemed to have Knowledge
of a
particular fact or other matter if such individual is actually aware of such
fact or other matter or would be expected to be aware of such fact or matter
after due inquiry. When used with respect to the Seller, Knowledge means the
Knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
21
“Laws”
means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
“Liabilities”
means all Indebtedness, obligations and other liabilities of a Person (whether
absolute, accrued, contingent, fixed or otherwise, or whether due or to become
due).
“Licenses”
means all licenses, permits, certificates of authority, authorizations,
approvals, registrations, franchises and similar consents granted or issued
by
any Governmental or Regulatory Authority.
“Liens”
means any mortgage, pledge, assessment, security interest, lease, lien, adverse
claim, levy, charge or other encumbrance of any kind, or any conditional sales
Contract, title retention Contract or other Contract to give any of the
foregoing.
“Loss”
means any and all damages, fines, fees, penalties, deficiencies, losses and
expenses (including without limitation interest, court costs, reasonable fees
of
attorneys, accountants and other experts or other expenses of litigation or
other proceedings or of any claim, default or assessment).
“Operative
Agreements” means, collectively, the other agreements to be entered into in
connection with the Acquisition.
“Order”
means any writ, judgment, decree, injunction or similar order of any
Governmental or Regulatory Authority (in each such case whether preliminary
or
final).
“Permitted
Lien” means (i) any Lien for Taxes not yet due or delinquent or being contested
in good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, (ii) any statutory Lien arising in the
ordinary course of business by operation of Law with respect to a Liability
that
is not yet due or delinquent and (iii) any minor imperfection of title or
similar Lien which individually or in the aggregate with other such Liens does
not materially impair the value of the property subject to such Lien or the
use
of such property in the conduct of the Business.
“Person”
means any natural person, corporation, general partnership, limited partnership,
limited liability company, proprietorship, other business organization, trust,
union, association or Governmental or Regulatory Authority.
“Pre-Closing
Tax Period” means
any
Tax period (or portion thereof) ending on or before the close of business on
the
Effective Date.
22
“Purchaser
Indemnified Parties” means Purchaser and the Parent, and each of their
respective officers, directors, employees, agents and Affiliates.
“Representative”
means a Person’s directors, officers, employees, agents, consultants, advisors
or other representatives, including legal counsel and accountants.
“Resolution
Period” means the period ending thirty (30) days following receipt by an
Indemnified Party of a written notice from an Indemnifying Party stating that
it
disputes all or any portion of a claim set forth in a Claim Notice or an
Indemnity Notice.
“Tax
Returns” 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.
“Taxes”
means any federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code Sec. 59A), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
ARTICLE
IX
MISCELLANEOUS
9.01 Notices.
All
notices, requests and other communications hereunder must be in writing and
will
be deemed to have been duly given only if delivered personally or by facsimile
transmission or mailed (first class postage prepaid) to the parties at the
following addresses or facsimile numbers:
If
to
Purchaser, to:
▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇▇
with
a
copy to:
▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇
▇.
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn:
▇▇▇▇ ▇. ▇▇▇▇, Esq.
23
If
to
Seller, to:
with
a
copy to:
▇▇▇▇▇▇
▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇
▇▇▇▇▇▇▇, P.C.
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
All
such
notices, requests and other communications will (a) if delivered personally
to
the address as provided in this Section, be deemed given upon delivery, (b)
if
delivered by facsimile transmission to the facsimile number as provided in
this
Section, be deemed given upon receipt, and (c) if delivered by mail in the
manner described above to the address as provided in this Section, be deemed
given upon receipt. Any party from time to time may change its address,
facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other party hereto.
9.02 Entire
Agreement.
This
Agreement, the Operative Agreements and the Nondisclosure Agreements supersede
all prior discussions and agreements between the parties with respect to the
subject matter hereof and thereof between the parties, and contain the sole
and
entire agreement between the parties hereto with respect to the subject matter
hereof and thereof. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, THE
NONDISCLOSURE AGREEMENTS OR THE OPERATIVE AGREEMENTS, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, RELATING TO THE SUBJECT
MATTER OF THIS AGREEMENT AND THE OPERATIVE AGREEMENTS.
9.03 Expenses.
Except
as otherwise expressly provided in this Agreement, whether or not the
transactions contemplated hereby are consummated, each party will pay its own
costs and expenses (including without limitation all broker’s or finder’s fees)
incurred in connection with the negotiation, execution and closing of this
Agreement and the Operative Agreements and the transactions contemplated hereby
and thereby.
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9.04 Waiver.
Any
term or condition of this Agreement may be waived at any time by the party
that
is entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All remedies, either under this Agreement
or
by Law or otherwise afforded, will be cumulative and not
alternative.
9.05 Amendment.
This
Agreement may be amended, supplemented or modified only by a written instrument
duly executed by or on behalf of each party hereto.
9.06 No
Third Party Beneficiary.
The
terms and provisions of this Agreement are intended solely for the benefit
of
each party hereto and their respective successors or permitted assigns, and
it
is not the intention of the parties to confer third-party beneficiary rights
upon any other Person other than any Person entitled to indemnity under
Article VI.
9.07 No
Assignment; Binding Effect.
Neither
this Agreement nor any right, interest or obligation hereunder may be assigned
by any party hereto without the prior written consent of the other party hereto
and any attempt to do so will be void, except (a) for assignments and transfers
by operation of Law and (b) that Purchaser may assign any or all of its rights,
interests and obligations hereunder to (i) a wholly-owned subsidiary, provided
that any such subsidiary agrees in writing to be bound by all of the terms,
conditions and provisions contained herein or (ii) any post-Closing purchaser
of
the Business or a substantial part of the Assets, but no such assignment shall
relieve Purchaser of its obligations hereunder. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and
assigns.
9.08 Headings.
The
headings used in this Agreement have been inserted for convenience of reference
only and do not define or limit the provisions hereof.
9.09 Invalid
Provisions.
If any
provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future Law, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely affected
thereby, (a) such provision will be fully severable, (b) this Agreement will
be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, (c) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by
the
illegal, invalid or unenforceable provision or by its severance herefrom and
(d)
in lieu of such illegal, invalid or unenforceable provision, there will be
added
automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
25
9.10 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the Laws of
the
State of Florida, without giving effect to the conflicts of laws principles
thereof. Any dispute under or relating to this Agreement or the transactions
contemplated hereunder may only be brought in the state coursts sitting in
▇▇▇▇▇
County, Florida. Each of the Parties hereto consents to the jurisdiction of
such
courts and agrees not to raise any defense to the laying of venue therein
including, without limitation, the defense of forum non conveniens.
9.11 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which will
be
deemed an original, but all of which together will constitute one and the same
instrument. Signatures delivered as facsimiles shall be binding to the same
extent as original signatures.
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by each
party as of the date first above written.
|
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|
By:
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Title:
CEO
|
|
|
|
|
|
By:
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Title:
CEO
|
|
|
GUARANTEE
|
|
| ____________________ |
Fnds3000,
Inc. hereby unconditionally guaranties the full and prompt payment and
performance of all of Purchaser’s duties and obligations hereunder. In the event
Purchaser fails at any time or times to pay or fulfill when due, or within
the
grace period therefore, any and all obligations of Purchaser which may accrue
hereunder, FNDS3000, Inc. promises to pay or satisfy, as applicable, any and
all
such obligations forthwith, upon demand. This Guarantee may not be terminated,
amended or supplemented, nor may any provision be waived, except by a writing
signed by Seller, and shall bind and benefit the successors and assigns of
the
FNDS3000, Inc.
26
FNDS3000,
INC.
By:
/s/▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
CEO
List
of
Exhibits:
Exhibit
1.01(a)(ii) - List of Phone Numbers
Exhibit
1.01(a)(iii) - List of other contracts assigned
Exhibit
1.01(b)(iv) - List of Website Domain Names Transferred
Exhibit
1.01(d) - List of Computers transferred
Exhibit
1.05 - Allocation of Purchase Price
Exhibit
4
- List of employee contracts
Seller
Disclosure Schedules
EXHIBIT
1.05
ALLOCATION
OF PURCHASE PRICE
|
Fixed
Assets
|
$353,000.00
|
|
Merchant
Portfolio
|
55%
of remainder of purchase price
|
|
New
Product Portfolio
|
45%
of remainder of purchase price
|
27