ASSET AND STOCK PURCHASE AGREEMENT
ASSET AND STOCK PURCHASE AGREEMENT
THIS ASSET AND STOCK PURCHASE AGREEMENT (“Agreement”), dated as of
December 28, 2012 is by and among IGX GLOBAL INC., a New Jersey corporation (“IGXUS”
or “Seller”), and ▇▇▇▇▇▇ ▇▇▇▇▇ (“Shareholder”), and IGXGLOBAL CORP., a Delaware
corporation (“Purchaser”) and iGAMBIT INC. (“iGambit”), a Delaware corporation.
W I T N E S S E T H:
Seller and IGXGLOBAL UK LIMITED, a private limited company registered in England
and Wales with number 5551268 (“IGXUK”) are in the business of providing IT solutions
specializing in security and network technology products, services, and support to customers
throughout the United States and Europe (the “IT Solutions Business”).
Purchaser is a wholly owned subsidiary of iGambit.
Shareholder is the sole shareholder of each of IGXUS and IGXUK.
The parties hereto wish to enter into this Agreement which sets forth the terms and
conditions upon which Purchaser agrees to purchase from the Seller and the Seller agrees to sell
to Purchaser, for the consideration stated herein, all of the assets of IGXUS (other than to the
extent specifically set forth herein) free and clear of all liens, liabilities and encumbrances and
Purchaser agrees to purchase from the Shareholder and Shareholder agrees to sell to Purchaser,
for the consideration stated herein the entire issued share capital of IGXUK, being 1 ordinary
share of £1.00 (the “IGXUK Shares”).
In consideration of the foregoing and of the covenants, agreements, conditions,
representations and warranties hereinafter contained, and intending to be legally bound hereby,
Purchaser, the Seller and the Shareholder hereby agree as follows:
1.
DEFINITIONS.
Unless otherwise defined below in this Section 1, the various capitalized terms used in
this Agreement shall have the definitions ascribed to them herein. As used in this Agreement,
the following terms shall have the meanings specified in this Section 1:
“Accounts Receivable” means: (1) all trade accounts receivable and other rights to
payment from customers of the Seller and the full benefit of all security for such accounts or
rights to payment, including all trade accounts receivable representing amounts receivable in
respect of services rendered to customers of the Seller; (2) all other accounts or notes receivable
of the Seller and the full benefit of all security for such accounts or notes; and (3) any Claim,
remedy or other right related to any of the foregoing.
“Agreed Liabilities Amount” means $2,500,000.
“Assumed Liabilities” means: (a) the total normal vendor and trade payables, capital
lease obligations, deferred liabilities, deferred revenue and certain accrued expenses as set forth
on Schedules 2.2(a) and (b); and (b) all Liabilities of Seller accruing and to be performed, after
the Closing Date, as set forth on Schedules 2.2(a) and (b) under the executory portion of each of
the Assigned Contracts and any other Assets (e.g. assigned licenses and leases).
“Assigned Contracts” means all of the Contracts except for the Excluded Contracts.
“Claim” means an action, suit, proceeding, demand, claim or counterclaim or legal,
administrative or arbitral proceeding or investigation.
“Contract” means all agreements, whether oral or written and whether express or
implied (whether legally binding or not), including contracts, contract rights, promises,
commitments, undertakings, customer accounts, orders, leases, guarantees, warranties and
representations and franchises to which either the Seller or IGXUK is a party.
“Copyrights” means all copyrights (whether or not registered), moral rights, and all
registrations and applications for registration thereof, as well as rights to renew copyrights, in
each case that are licensed by Seller or IGXUK and/or otherwise used in the IT Solutions
Business as currently operated.
“Creditors” means, those parties to which either Seller or IGXUK owes any one or more
of the liabilities included in the Agreed Liabilities Amount, as set forth on Schedule 2.2(a).
“Excluded Assets” means: (a) Excluded Contracts; (b) any of the Purchase Price (as
defined in Section 2.2(a)); (c) the minute books, seal and other records having to do with the
organization of IGXUS; (d) Seller’s or any of its affiliate’s rights under this Agreement and any
Transaction Document; (e) all Tax credits, and refunds pertaining to Taxes which are not
Assumed Liabilities hereunder, and all related Tax Returns and associated workpapers; (f) all
Employee Benefit Plans (as defined in Section 3.18(a)) and assets held in trust or otherwise by or
for the benefit of any current or former employees of IGXUS under any Employee Plan; and (g)
the assets listed on Schedule 2.1(a).
“Excluded Contracts” means the Contracts not to be assigned by Seller pursuant to this
Agreement, as set forth on Schedule 3.22.
“Governmental Authorities” means all agencies, authorities, bodies, boards,
commissions, courts, instrumentalities, legislatures and offices of any nature whatsoever of any
government, quasi-governmental unit or political subdivision, whether foreign, federal, state,
county, district, municipality, city or otherwise (each, a “Governmental Authority”).
“Intellectual Property” means all (i) Patents, (ii) Know-how, (iii) Trademarks, (iv)
Copyrights, (v) software programs (including but not limited to “off-the-shelf” shrink-wrap and
click-wrap software programs), in each case that are licensed by Seller, IGXUK and/or otherwise
used in the IT Solutions Business as currently operated, and (vi) all other intellectual property
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rights and industrial property rights (of every kind and nature throughout the universe and
however designated), whether arising by operation of law, contract, license or otherwise, in each
case that are licensed by Seller and/or otherwise used in the IT Solutions Business as currently
operated.
“Intellectual Property Rights” means, collectively, any and all known or hereafter
known tangible and intangible rights under patent, trademark, copyright and trade secret laws,
and any other intellectual property, industrial property and proprietary rights worldwide, of
every kind and nature throughout the universe, however designated, whether arising by operation
of law, contract, license or otherwise.
“Key Seller or IGXUK Employee” means the following employee of Seller: ▇▇▇▇▇▇
▇▇▇▇▇.
“Know-how” means any and all product specifications, processes, methods, product
designs, plans, trade secrets, ideas, concepts, inventions, manufacturing, engineering and other
manuals and drawings, physical and analytical, safety, quality control, technical information,
data, research records, all promotional literature, customer and supplier lists and similar data and
information, which, in each case, are licensed to or owned by Seller, IGXUK and/or otherwise
used in the IT Solutions Business as currently operated; and any and all other confidential or
proprietary technical and business information which are licensed to or owned by Seller and/or
otherwise used in the IT Solutions Business as currently operated.
“Knowledge” means, with respect to a given matter the actual knowledge of the Seller,
any officer thereof or Shareholder, or the knowledge that the Seller, any officer thereof or
Shareholder should possess in the exercise of reasonable diligence and investigation with respect
to the matter.
“Liability” means any direct or indirect indebtedness, liability, assessment, expense,
claim, loss, damage, deficiency, obligation or responsibility, known or unknown, disputed or
undisputed, joint or several, vested or unvested, executory or not, fixed or unfixed, ▇▇▇▇▇▇ or
inchoate, liquidated or unliquidated, secured or unsecured, determinable or undeterminable,
accrued or unaccrued, absolute or not, actual or potential, contingent or otherwise (including but
not limited to any liability under any guarantees, letters of credit, performance credits or with
respect to insurance loss accruals).
“Material Adverse Effect” means any material adverse change in or effect upon (a) the
financial condition, assets, liabilities, or operations of (x) the Seller and IGXUK taken as a
whole, (y) the IT Solutions Business of the Seller, IGXUK, the Assets and the assets of IGXUK
(taken as a whole), or (b) the ability of any of the Seller or Shareholder to execute, deliver and
perform this Agreement, provided that none of the following shall be deemed to constitute, and
none of the following shall be taken into account in determining whether there has been, a
Material Adverse Effect: any adverse change, event, development, or effect arising from or
relating to (i) general business or economic conditions, including such conditions which affect
the IT solutions industry generally (provided they do not have a materially disproportionate
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effect on the Seller and IGXUK, as a whole), (ii) national or international political or social
conditions, (iii) financial, banking, or securities markets (including any disruption thereof and
any decline in the price of any security or any market index), (iv) changes in United States
generally accepted accounting principles, or (v) changes in law, rules, regulations, orders, or
other binding directives issued by any governmental authority (provided they do not have a
materially disproportionate effect on the Seller and IGXUK as a whole).
“Moral Rights” means, collectively, rights to claim authorship of a work, to object to or
prevent any modification of a work, to withdraw from circulation or control the publication or
distribution of a work, and any similar rights, whether existing under judicial or statutory law of
any country or jurisdiction worldwide, or under any treaty or similar legal authority, regardless
of whether such right is called or generally referred to as a “moral right.”
“Patents” means all patents, patent disclosures and patent applications (including,
without limitation, all reissues, divisions, continuations, continuations-in-part, renewals, re-
examinations and extensions of the foregoing) owned by or licensed to Seller, IGXUK and/or
otherwise used in the IT Solutions Business as currently operated.
“Permitted Liens” means (i) the Assumed Liabilities, and Liens associated therewith, (ii)
Liens securing the Agreed Liabilities Amount owing to Creditors, and (iii) with respect to
Licensed Intellectual Property, the rights held by the applicable licensors thereof.
“Person” means any individual, corporation, joint venture, partnership, limited
partnership, limited liability company, limited liability partnership, syndicate, trust, association,
entity or government or political subdivision, agency or instrumentality of a government.
“Purchase Payment Amount” means $1,500,000.
“Tangible Personal Property” means all machinery, equipment, tools, furniture, fixtures
and equipment, computer hardware, supplies, materials, leasehold improvements, automobiles,
computing and telecommunications equipment and other items of tangible personal property, of
every kind owned or leased by the Seller, IGXUK and/or otherwise used in the IT Solutions
Business (wherever located and whether or not carried on the books of the Seller and/or
IGXUK), together with any express or implied warranty by the manufacturers or sellers or
lessors of any item or component part thereof, and all maintenance records and other documents
relating thereto.
“Taxes” means: (1) any and all taxes, fees, levies, duties, tariffs, imposts and other
charges of any kind, imposed by any Governmental Authority or taxing authority, including
taxes or other charges on, measured by, or with respect to income, franchise, windfall or other
profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security,
workers’ compensation, unemployment compensation or net worth; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, value-added or gains taxes; license,
registration and documentation fees; and customers’ duties, tariffs and similar charges; (2) any
Liability for the payment of any amounts of the type described in (1) as a result of being a
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member of an affiliated, combined, consolidated or unitary group for any taxable period; (3) any
Liability for the payment of amounts of the type described in (1) or (2) as a result of being a
transferee of, or a successor in interest to, any Person or as a result of an express or implied
obligation to indemnify any Person; and (4) any and all interest, penalties, additions to tax and
additional amounts imposed in connection with or with respect to any amounts described in (1),
(2) or (3).
“Tax Return” means any return, report, statement, form or other documentation
(including any additional or supporting material and any amendments or supplements) filed or
maintained, or required to be filed or maintained, with respect to or in connection with the
calculation, determination, assessment or collection of any Taxes in the United States as applied
to Seller and in the United Kingdom as applied to IGXUK.
“Trademarks” means (i) trademarks, service marks, trade names, trade dress, labels,
logos and all other names and slogans used exclusively with any products or embodying
associated goodwill of the IT Solutions Business related to such products, whether or not
registered, and any applications or registrations therefor, and (ii) any associated goodwill
incident thereto; in each case owned by or licensed to Seller, IGXUK and/or otherwise used in
the IT Solutions Business as currently operated.
2.
PURCHASE AND SALE OF ASSETS.
2.1
Assets Included.
(a)
Acquired Assets. On the terms and subject to the conditions set forth in
this Agreement, and in reliance upon the covenants, representations and warranties of the Seller
and the Shareholder, at the Closing (as defined in Section 2.3 hereof), Purchaser shall purchase
from the Seller, and the Seller shall sell, assign, transfer and deliver to Purchaser, free and clear
of any and all Liabilities, pledges, liens, obligations, claims, charges, tenancies, security
interests, exceptions or encumbrances whatsoever (collectively, “Liens”), other than Permitted
Liens, all assets, rights and properties of the Seller, of every nature, kind and description
whatsoever, tangible and intangible, wherever located and as they exist on the date hereof, other
than the Excluded Assets (collectively, the “Assets”). The Assets are more fully set forth on
Schedules 2.1(a) and (b) of the disclosure schedules attached hereto and include (but are not
limited to) the following:
(i)
Cash in bank accounts of the Seller immediately prior to the
Closing;
(ii)
All Tangible Personal Property;
(iii) All Accounts Receivable;
(iv)
All of the Assigned Contracts;
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(v)
All permits relating to the acquisition or ownership of the Assets
or the operation of the IT Solutions Business;
(vi)
All data, records, files, manuals, blueprints and other
documentation related to the Seller, the Assets and the operation of the IT Solutions Business,
including but not limited to (1) service and warranty records; (2) sales promotion materials,
creative materials, art work, photographs, public relations and advertising materials, studies,
reports, correspondence and other similar documents and records used in the IT Solutions
Business, whether in electronic form or otherwise; (3) all client and customer lists, telephone
numbers and electronic mail addresses with respect to past, present or prospective clients and
customers; (4) all accounting and tax books, ledgers and records and other financial records
relating to the IT Solutions Business and the Assets; (5) all sales and credit records and
brochures relating to the IT Solutions Business, purchasing records and records relating to
suppliers; and (6) subject to applicable Law, copies of all personnel records of all Seller
employees, including the Key Seller Employees.
(vii) All of the Seller’s furniture and fixtures, as set forth on Schedule
2.1(a)(vii) hereto (the “Furniture and Fixtures”);
(viii) All of the Seller’s tools and equipment, as set forth on Schedules
2.1(a)(viii) hereto (the “Equipment”);
(ix)
All of the inventory, merchandise, stores of supplies, spare parts,
stock-in-trade and work in progress, including, without limitation, the items set forth on the
Inventory Statement attached hereto as Schedule 2.1(a)(ix);
(x)
All Intellectual Property;
(xi)
All policies and procedures, methods of delivery of services, trade
secrets, disks, drawings and specifications, market studies, consultants’ reports, prototypes, and
all similar property of any nature, tangible or intangible, used in connection with the IT
Solutions Business;
(xii) All goodwill incident to the IT Solutions Business, including the
value of the names associated with the IT Solutions Business that are transferred to Purchaser
hereunder and the value of good customer relations;
(xiii) All computers, software programs, automation systems, accounting
systems, master disks of source codes, and other proprietary information owned or licensed,
whether for general business usage (e.g. accounting, word processing, graphics, spreadsheet
analysis, etc.) or specific, unique-to-the-business usage, and all computer operating, security or
programming software, owned or licensed and used in the operation of the IT Solutions
Business;
(xiv) All tangible and intangible forms, whether or not stored, compiled
or memorialized, electronically, graphically, photographically, or in writing; and
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(xv) All other intangible assets (including all Claims, contract rights
and warranty and product liability claims against third parties) relating to the Assets or the IT
Solutions Business.
(b)
Sale and Purchase of IGXUK Stock. Subject to the terms and conditions
of this Agreement, Purchaser agrees to purchase from Shareholder, and Shareholder agrees to
sell to Purchaser, the IGXUK Shares for the consideration specified in this Agreement.
2.2.
Purchase Price.
(a)
Purchase Price Payable. In reliance on the representations and warranties
of the Seller and the Shareholder, and the performance of the covenants and fulfillment of the
conditions set forth in this Agreement, Purchaser will, at the Closing, purchase the Assets from
the Seller and the all of the IGXUK Shares from the Shareholder, and in respect thereof will,
subject to the provisions of this Agreement, pay an aggregate purchase price (“Purchase Price”)
to Seller and Shareholder equal to the sum of the amounts set forth in (1), (2), (3) and (4) below.
(1)
$1,500,000 at Closing (“Purchase Payment”), payable as follows:
(i)
$500,000 in cash; and
(ii)
Purchaser shall execute a promissory note, which shall be
guaranteed by iGambit, and issue the same to Shareholder in the principal sum of $1,000,000,
plus any balance of the Agreed Liabilities Amount due to be paid to applicable Creditors
pursuant to Section 2.2(b)(2) below, bearing interest at the rate of 6% A.P.R., with a maturity
date of the earlier of (1) iGambit’s completion of a capital raising transaction (or a series
of
related transactions) with gross proceeds of at least $5 Million or (2) January 1, 2014, substantially
in the form attached as Exhibit 2.2(a)(1)(ii) (the “Shareholder Note”).
(2)
The Agreed Liability Amount, payable pursuant to the provisions of
Section 2.2(b) below;
(3)
IGXUS (or, at the direction of IGXUS, the Shareholder) will also receive
an aggregate of 3.75 million iGambit Common voting shares (the “Shares”) over a three-year
period starting on the first through third (3rd) anniversary of the Closing Date, based upon the
following:
(i)
Year 1: 1.25 million Shares. The issuance of 937,500
Shares is conditioned upon IT Solutions Business revenue for the
year ended December 31, 2013 being $44,000,000 (the “Year 1
Revenue Threshold”); and the issuance of 312,500 Shares is
conditioned upon EBITDA for the year ended December 31, 2013
being $1,700,000 (the “Year 1 EBITDA Threshold”).
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(ii)
Year 2: 1.25 million Shares. The issuance of 937,500
Shares is conditioned upon IT Solutions Business revenue for the
year ended December 31, 2014 being $48,000,000 (the “Year 2
Revenue Threshold”); and the issuance of 312,500 Shares is
conditioned upon EBITDA for the year ended December 31, 2014
being $2,400,000 (the “Year 2 EBITDA Threshold”); provided,
however, that: (A) to the extent that the IT Solutions Business
revenue for the year ended 12/31/13 exceeded the Year 1 Revenue
Threshold (the “Year 1 Excess Revenue”), such Year 1 Excess
Revenue shall be added to the IT Solutions Business revenue for
the year ended 12/31/14 for the purposes of determining the Year 2
Revenue Threshold; and (B) to the extent that the IT Solutions
Business EBITDA for the year ended 12/31/13 exceeded the Year
1 EBITDA Threshold (the “Year 1 Excess EBITDA”), such Year
1 Excess EBITDA shall be added to the IT Solutions Business
EBITDA for the year ended 12/31/14 for the purposes of
determining the Year 2 EBITDA Threshold.
(iii) Year 3: 1.25 million Shares. The issuance of 937,500
Shares is conditioned upon IT Solutions Business revenue for the
year ended December 31, 2015 being $53,000,000 (the “Year 3
Revenue Threshold”); and the issuance of 312,500 Shares is
conditioned upon EBITDA for the year ended December 31, 2015
being $2,600,000 (the “Year 3 EBITDA Threshold”); provided,
however, that: (A) to the extent that the IT Solutions Business
revenue for the year ended 12/31/14 exceeded the Year 2 Revenue
Threshold (the “Year 2 Excess Revenue”), such Year 2 Excess
Revenue shall be added to the IT Solutions Business revenue for
the year ended 12/31/15 for the purposes of determining the Year 3
Revenue Threshold; (B) to the extent that any Year 1 Excess
Revenue was not used in determining whether the Year 2 Revenue
Threshold was met pursuant to clause (ii) above, such Year 1
Excess Revenue shall be added to the IT Solutions Business
revenue for the year ended 12/31/15 for the purposes of
determining the Year 3 Revenue Threshold; (C) to the extent that
the IT Solutions Business EBITDA for the year ended 12/31/14
exceeded the Year 2 EBITDA Threshold (the “Year 2 Excess
EBITDA”), such Year 2 Excess EBITDA shall be added to the IT
Solutions Business EBITDA for the year ended 12/31/15 for the
purposes of determining the Year 3 EBITDA Threshold; and (D)
to the extent that any Year 1 Excess EBITDA was not used in
determining whether the Year 2 EBITDA Threshold was met
pursuant to clause (ii) above, such Year 1 Excess EBITDA shall be
added to the IT Solutions Business EBITDA for the year ended
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12/31/15 for the purposes of determining the Year 3 EBITDA
Threshold.
(4)
Seller shall receive a contingent earn-out of an aggregate of $3.75
million in cash over a three-year period starting on the first through third anniversary of
signing of this agreement, based upon the following:
(i)
Year 1: $937,500 of the cash payment will be conditioned
upon IT Solutions Business revenue for the year ended December
31, 2013 meeting the Year 1 Revenue Threshold; and $312,500 of
the cash payment will be conditioned upon EBITDA for the year
ended December 31, 2013 meeting the Year 1 EBITDA Threshold.
(ii)
Year 2: $937,500 of the cash payment will be conditioned
upon IT Solutions Business revenue for the year ended December
31, 2014 meeting the Year 2 Revenue Threshold; and $312,500 of
the cash payment will be conditioned upon EBITDA for the year
ended December 31, 2014 meeting the Year 2 EBITDA Threshold;
provided, however, that: (A) to the extent that there is any Year 1
Excess Revenue, such Year 1 Excess Revenue shall be added to
the IT Solutions Business revenue for the year ended 12/31/14 for
the purposes of determining the Year 2 Revenue Threshold; and
(B) to the extent that there is any Year 1 Excess EBITDA, such
Year 1 Excess EBITDA shall be added to the IT Solutions
Business EBITDA for the year ended 12/31/14 for the purposes of
determining the Year 2 EBITDA Threshold.
(iii) Year 3: $937,500 of the cash payment will be conditioned
upon IT Solutions Business revenue for the year ended December
31, 2015 meeting the Year 3 Revenue Threshold; and $312,500 of
the cash payment will be conditioned upon EBITDA for the year
ended December 31, 2015 meeting the Year 3 EBITDA Threshold;
provided, however, that: (A) to the extent that there is any Year 2
Excess Revenue, such Year 2 Excess Revenue shall be added to
the IT Solutions Business revenue for the year ended 12/31/15 for
the purposes of determining the Year 3 Revenue Threshold; (B) to
the extent that any Year 1 Excess Revenue was not used in
determining whether the Year 2 Revenue Threshold was met
pursuant to clause (ii) above, such Year 1 Excess Revenue shall be
added to the IT Solutions Business revenue for the year ended
12/31/15 for the purposes of determining the Year 3 Revenue
Threshold; (C) to the extent that there is any Year 2 Excess
EBITDA, such Year 2 Excess EBITDA shall be added to the IT
Solutions Business EBITDA for the year ended 12/31/15 for the
purposes of determining the Year 3 EBITDA Threshold; and (D)
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to the extent that any Year 1 Excess EBITDA was not used in
determining whether the Year 2 EBITDA Threshold was met
pursuant to clause (ii) above, such Year 1 Excess EBITDA shall be
added to the IT Solutions Business EBITDA for the year ended
12/31/15 for the purposes of determining the Year 3 EBITDA
Threshold.
(b)
Payment of Agreed Liability Amount.
(1)
Notwithstanding the provisions hereof, including but not limited to
the provisions of Section 2.2(b)(2) hereof, the Seller shall transfer the Assets to the Purchaser at
Closing free and clear of any and all Liens and any and all Liabilities (other than, in each case,
Assumed Liabilities and Permitted Liens), and (2) the Purchaser shall not, by virtue of its
purchase of the Assets, assume or become responsible for any Liabilities of the Seller or of any
other Person whatsoever other than the Assumed Liabilities. Other than the Assumed Liabilities,
all Liabilities of the Shareholder or Seller whatsoever, whether or not disclosed to Purchaser, and
whether or not discharged pursuant to the provisions of Section 2.2(b)(2) hereof or otherwise
under this Agreement or the Schedules attached hereto, shall constitute “Excluded Liabilities”.
The Seller and the Shareholder hereby jointly and severally covenant and agree to indemnify and
hold Purchaser harmless with respect to all Excluded Liabilities pursuant to Section 6 hereof. If,
subsequent to the Closing, any Excluded Liability is asserted against the Purchaser or any
affiliate thereof, then, notwithstanding any provision hereof to the contrary, the Purchaser shall
be permitted to pay, satisfy and discharge such Excluded Liability in any manner Purchaser
determines, in its reasonable discretion, and such payment, satisfaction or discharge shall in no
way undermine or diminish the right of Purchaser to seek indemnification therefor with respect
thereto in accordance with Section 6. In addition, Purchaser shall be entitled to the remedy of
indemnification pursuant to Section 6 and set-off pursuant to Section 2.2(c) with respect to any
such payment, satisfaction or discharge of any Excluded Liability by Purchaser in accordance
with the foregoing. Notwithstanding the foregoing, subsequent to the Closing, Purchaser, rather
than Seller or the Shareholder, shall be responsible for the satisfaction of any Assumed
Liabilities.
(2)
Prior to the Closing (as defined in Section 2.3 hereof), Seller shall
update Schedule 2.2(a) to reflect, as to each Creditor, the amount that such Creditor has agreed
to accept in order to fully and completely discharge all obligations of either Seller in favor of
such Creditor, and Seller shall provide evidence to Purchaser and Keltic Financial Partners, LLC
(the “Financing Source”), including payoff letters from each Creditor, substantially in form and
substance attached hereto as Exhibit 2.2(b)(2), indicating that each Creditor has in fact agreed to
accept the amount set forth next to its name on such updated Schedule 2.2(a) to fully and
completely discharge all obligations of Seller in favor of such Creditor, with the aggregate
amount reflected on such updated Schedule 2.2(a) to be equal to or less than the Agreed
Liabilities Amount. At such time as each of the Creditors specified on Schedule 2.2(a) attached
hereto presents the Financing Source with a duly executed satisfaction and release (and with
respect to Creditors holding recorded Liens, an appropriate instrument of release), each in such
form as is satisfactory to the Financing Source in its sole and absolute discretion (provided that if
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the release is substantially in the form of Exhibit 2.2(b)(2) then such release shall be deemed
satisfactory to Financing Source for purposes hereof), the Financing Source shall release the
amount of cash set forth opposite such Creditor’s name (if any) on such updated Schedule 2.2(a)
to such Creditor.
(c)
Purchaser’s Right of Set-Off. In addition to the rights and remedies set
forth elsewhere in this Agreement, the Purchaser shall have the right to set off against (i) the
payment of any liabilities or obligations of Seller or Shareholder which were not shown on
Seller’s or IGXUK’s general ledger or otherwise disclosed to Purchaser or iGambit (or any of
their respective employees, representatives or agents), including, but not limited to, trade
account disputes, back taxes and penalties, or (ii) any payment otherwise due to Seller
hereunder the amount of Losses for which Purchaser is entitled to indemnification pursuant to
Section 6.
(d)
Prepaid Items. Liabilities for prepaid items attributable to the Assets, such
as real estate taxes, personal property taxes, rent, fuel, telephone or other utility and service
charges, shall be prorated and allocated between the Seller and Purchaser as of the close of
business on the Closing Date, and the amount of such proration shall be a deduction or addition,
as the case may be, to the Purchase Price.
(e)
Allocation of Purchase Price. The Purchaser, Shareholder and the Seller
hereby agree upon an allocation of the Purchase Price of the Acquired Assets and the IGXUK
Shares pursuant to Section 1060 of the Code and the Income Tax Regulations as Exhibit 2.2(e).
The Purchaser and the Seller hereby agree to reflect such allocation on IRS Form 8594 (Asset
Acquisition Statement) under Section 1060, including any required amendments or supplements
thereto (“Form 8594”), and shall jointly prepare such Form 8594 for execution promptly after
Closing. The parties hereto further agree that (i) the agreed upon allocation of the Purchase
Price shall be used in filing all required forms under Section 1060 of the Code and all tax
returns; and (ii) they will not take any position inconsistent with such allocation upon any
examination of any such tax return, in any refund claim or in any tax litigation.
2.3
Closing.
(a)
Time and Place. Subject to the terms and conditions of this Agreement,
the sale and purchase of the Assets and IGXUK Shares contemplated hereby (the “Closing”)
shall take place, on the date hereof, remotely by exchanging executed counterparts of this
Agreement, and the other agreements, instruments, certificates and other documents to be
entered into, or delivered, in connection herewith or therewith (collectively, the “Transaction
Documents”), and delivery of the Purchase Price. The time and date of the Closing are herein
referred to as the “Closing Date,” and the term “Closing Date” shall include the date on which
the transactions contemplated hereunder are consummated.
(b)
Deliveries by Purchaser to the Seller. At the Closing, Purchaser (or its
designee) shall deliver or cause to be delivered each of the following:
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(i)
Cash and a Shareholder Note duly executed by iGambit, in the
amount of the Purchase Payment Amount, as provided for under Section 2.2(a) hereof;
(ii)
Intentionally Omitted;
(iii) The Employment Agreement (as defined herein), executed by the
Purchaser;
(iv)
Intentionally Omitted;
(v)
Intentionally Omitted;
(vi)
A Certificate of the Secretary of each of Purchaser and iGambit
showing the signatures of those officers of Purchaser and iGambit, respectively, authorized to
sign this Agreement, the Employment Agreement, the Shareholder Note, and all other
Transaction Documents on behalf of Purchaser and iGambit and certifying that said signatures
are the signatures of said authorized officers;
(vii) Good standing certificates of each of Purchaser and iGambit, dated
no earlier than ten (10) calendar days prior to the Closing Date, certifying respectively (i) that
Purchaser is in good standing in the State of Delaware; and (ii) that iGambit is in good standing
in the State of Delaware;
(viii) Resolutions of the shareholders (if necessary) and the directors of
each of Purchaser and iGambit certified by the Secretary of each of Purchaser and iGambit as
having been duly and validly adopted and as being in full force and effect on the date hereof,
authorizing the execution and delivery by each of Purchaser and iGambit of this Agreement and
other Transaction Documents, and authorizing the performance by Purchaser and iGambit of the
transactions contemplated hereby and thereby;
(ix)
A duly executed certificate of Purchaser and iGambit described in
Section 8.1 hereof;
(xi)
Duly executed assumptions from Purchaser, assuming all of the
Assumed Liabilities; and
(xii) All other documents necessary or appropriate, in the reasonable
opinion of Seller, to effectuate the purchase and sale of the Assets at the Closing in accordance
with the provisions of this Agreement.
(c)
Deliveries by the Seller and the Shareholder. At Closing, the Seller and/or
the Shareholder, as applicable, shall deliver or cause to be delivered to the Purchaser (or its
designee) each of the following:
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(i)
An Assignment and ▇▇▇▇ of Sale, in such form as mutually agreed
by the parties, executed by the Seller, selling, assigning, transferring and delivering to Purchaser
all of the Assets, free and clear of any and all Liens (other than Permitted Liens);
(ii)
A Certificate of the Secretary of IGXUS showing the signatures
of those officers of IGXUS , authorized to sign this Agreement on behalf of IGXUS and
certifying that said signatures are the signatures of said authorized officers;
(iii) A copy of the Articles of Incorporation and By-Laws of IGXUS,
together with all amendments and supplements thereto, certified by the Secretary of IGXUS as
being true and complete in all material respects; and the Memorandum and Articles of
Association of IGXUK, together with all amendments and supplements thereto;
(iv)
Good standing certificates or certificate of existence or the
certificate of authorization, as applicable of each of IGXUS and IGXUK dated no earlier than ten
(10) calendar days prior to the Closing Date, certifying respectively (i) that IGXUS is in good
standing in the State of New Jersey and is qualified to do business in the State of Connecticut;
(ii) that IGXUS is qualified to do business in all of the other states in which IGXUS then does
business; (iii) that IGXUK is in good standing in the United Kingdom and is qualified to do
business in the United Kingdom and (iv) that IGXUK is qualified to do business in all of the
other countries in which IGXUK then does business;
(v)
Resolutions of the shareholders (if necessary) and the directors of
IGXUS certified by the Secretary of IGXUS as having been duly and validly adopted and as
being in full force and effect on the date hereof, authorizing the execution and delivery by
IGXUS of this Agreement and other Transaction Documents, and authorizing the performance
by IGXUS of the transactions contemplated hereby and thereby;
(vi)
A duly executed certificate of Seller and Shareholder described in
Section 8.1 hereof;
(vii) Intentionally omitted;
(viii) Duly executed employment agreement from the Key Seller
Employee in a form attached hereto as Exhibit 2.3(c)(viii) (the “Employment Agreement”)
which shall provide a minimum three (3) year term, and shall provide that such Key Employee
will participate in the programs generally offered to the Purchaser’s executive team with respect
to performance bonuses, medical benefits, insurance and the like;
(ix)
Duly executed confidentiality agreements from Seller’s employees,
as set forth on Schedule 2.3(c)(ix), that are offered and accept employment with the Purchaser
(other than Key Seller Employee, whose confidentiality obligations shall be set forth in the
Employment Agreement) in a form reasonably satisfactory to Purchaser (collectively, the
“Confidentiality Agreements”);
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(x)
Duly executed assignments from Seller assigning all of Seller’s
rights in, to and under the Assigned Contracts to the Purchaser on such terms and conditions as
the Purchaser shall in the exercise of reasonable discretion determine (collectively, the “Contract
Assignments”);
(xi)
Duly executed written consents from each of the parties to each of
the Assigned Contracts, to the extent such consent is required pursuant to the terms thereof,
consenting to the assignment of the Contracts to the Purchaser, in such form as Purchaser shall in
the exercise of reasonable discretion determine (collectively, the “Consents”), except, however,
Consents from those third parties listed on Schedule 3.2, which shall be attained after Closing;
(xii) Duly executed assignments of the existing Leases referred to on
Schedule 3.20 from Seller to Purchaser, in form and substance reasonably satisfactory to
Purchaser, and the consent of the landlord under such Lease to such assignment;
(xiii) Any documentation reasonably requested by Keltic Financial
Services to be executed by Seller, IGXUK or Shareholder;
(xiv) A duly executed assignment of Seller’s rights, as applicable, to all
of the third party software identified on Schedule 3.21(b), in each case, in form and substance
reasonably satisfactory to the Purchaser;
(xv) All other documents necessary or appropriate, in the reasonable
opinion of Purchaser, to effectuate the purchase and sale of the Assets at the Closing, free and
clear of all Liens (other than Permitted Liens), in accordance with the provisions of this
Agreement; and
(xvi) One or more share certificates representing the IGXUK Shares (or
an appropriate indemnity if such certificate has been lost) for cancellation by IGXUK, together
with a stock transfer form in respect of the same in favor of the Purchaser to be dated on the
Closing Date and executed by Shareholder.
2.4
Further Assurances. In addition to the actions, documents and instruments
specifically required to be taken or delivered hereby, prior to and after the Closing and without
further consideration, each party shall execute, acknowledge and deliver such other assignments,
transfers, consents and other documents and instruments and take such other actions as any party
or its/his counsel may reasonably request to complete and perfect the transactions contemplated
by this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER AND THE
SELLER.
The Seller and the Shareholder hereby jointly and severally represent and warrant
to Purchaser that the following representations and warranties are true and correct in all material
respects on the date hereof and will be true and correct in all material respects on and as of the
Closing Date:
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3.1
Organization and Good Standing.
(a)
IGXUS is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey and in all other states in which IGXUS does
business, is qualified to do business in the State of Connecticut and all other states in which
IGXUS does business and where the nature of its business or the nature and location of its assets
requires such qualification, except in those jurisdictions where the failure to qualify would not
have a Material Adverse Effect ; and has full corporate power to execute, deliver and perform its
obligations under this Agreement.
(b)
IGXUK is a private limited company duly organized, validly existing and
in good standing under the laws of England and Wales and is qualified to do business in
England and Wales and all other countries in which IGXUK does business and where the nature
of its business or the nature and location of its assets requires such qualification, except in those
jurisdictions where the failure to qualify would not have a Material Adverse Effect (as
hereinafter defined); and has full corporate power to execute, deliver and perform its obligations
under this Agreement.
3.2
Authority and Consents. The Seller and the Shareholder have full power to enter
into and to carry out the terms of this Agreement. The Seller and its directors have taken all
action, corporate and otherwise, necessary to authorize the execution, delivery and performance
of this Agreement, the completion of the transactions contemplated hereby and the execution and
delivery of any and all instruments necessary or appropriate to effectuate fully the terms and
conditions of this Agreement. Except as set forth on Schedule 3.2, no consent or approval of any
third party, court, governmental agency, other public authority or third party with any actual or
alleged interest in the Seller’s business or the Assets is required as a condition to (a) the
authorization, execution, delivery and performance of this Agreement or any other instruments
necessary to effectuate this Agreement; or (b) the consummation by the Seller of the transactions
contemplated herein. This Agreement has been properly executed and delivered by the
Shareholder and the Seller and constitutes the valid and legally binding obligation of the
Shareholder and the Seller and is enforceable against the Shareholder and the Seller in
accordance with its terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights in general and subject to general principles of equity and the discretion of courts
in granting equitable remedies.
3.3
Rights of First Refusal; Right of First Negotiation, Etc. There are no applicable
rights of first refusal, rights of first negotiation, rights of first offer or similar rights of any kind
that would require either Seller or the Shareholder to provide any third party with notice, an
opportunity to discuss, negotiate or to engage in any of the transactions contemplated hereby
prior to consummating the transactions contemplated hereby.
3.4
No Conflict. Neither the execution and delivery of this Agreement nor the
carrying out of the transactions contemplated hereby will result in (a) any violation, termination
or modification of, or conflict with, the articles of incorporation or By-Laws of Seller or the
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articles of association of IGXUK or any of the contracts or other instruments to which either
Seller or the Shareholder is a party, or of any judgment, decree or order applicable to either
Seller or the Shareholder; or (b) the creation of any Lien on all or any portion of the Assets.
3.5
Broker’s and Finder’s Fees. No broker, finder, agent, representative or similar
intermediary has acted as a broker for or on behalf of the Seller, IGXUK or Shareholder in
connection with this Agreement or the transactions contemplated hereby, and no broker, finder,
agent or similar intermediary is entitled to a brokerage commission, finder’s fee, advisory fee or
other like payment (each, a “Broker’s Fee”) in connection herewith, based on any agreement or
understanding with Seller, IGXUK or Shareholder, or any action taken by Shareholder, IGXUK
or Seller. Any such Broker’s Fee based on any agreement or understanding with Seller, IGXUK
or Shareholder, or any action taken by Seller, IGXUK or Shareholder which may be due in
connection with the purchase and sale contemplated by this Agreement will be borne by the
Seller, IGXUK or Shareholder who has entered into the agreement to pay.
3.6
Litigation and Compliance. There is no Claim pending or, to the Seller’s
Knowledge, threatened against the Assets of either IGXUK or Seller. Neither Seller, IGXUK
nor the Shareholder are subject to any order of any court, regulatory commission, board or
administrative body entered in any proceeding to which IGXUS or IGXUK is a party or of which
any of the foregoing has Knowledge. Within the last 3 years, the Seller and IGXUK have
complied with, in all material respects, and is currently in compliance with, in all material
respects, all laws, rules, regulations, orders, ordinances, judgments and decrees of any
governmental authority applicable to the Assets or the Seller’s IT Solutions Business.
3.7
Title and Condition of Assets. The Seller and (where applicable) IGXUK have
good and marketable title to all of the Assets, free and clear of all Liens (other than Permitted
Liens).
3.8
Accounts Receivable. All Accounts Receivable of the Seller and IGXUK
reflected in the balance sheet for the most recently ended period included in the Financial
Statements (as defined in Section 3.10), and all Accounts Receivable that have arisen since the
date of the latest balance sheet of Seller and IGXUK included in the Financial Statements
(except Accounts Receivable that have been collected since such date) are, to the Seller’s and
Shareholder’s Knowledge, valid and enforceable claims, and constitute bona fide Accounts
Receivable resulting from the provision of services in the ordinary course of the Seller’s IT
Solutions Business. To the Seller’s and Shareholder’s Knowledge, the Accounts Receivable are
subject to no valid defense, offsets, returns, allowances or credits of any kind, except as reserved
against on the most recent balance sheet or those which are not material, individually or in the
aggregate, to Seller and arise in the ordinary course of the Seller’s IT Solutions Business; and, to
Seller’s and Shareholder’s Knowledge, are fully collectible within sixty (60) days from their due
date. Except for the Accounts Receivable, advances to employees in the ordinary course of
business and prepayment of expenses incurred in the ordinary course of business, the Seller and
IGXUK have not made any loan or advance to any Person.
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3.9
Transfer of Capital Stock. Shareholder has the full right, power and authority to
transfer the IGXUK Shares to be sold by Shareholder to Purchaser pursuant to this Agreement,
and upon, consummation of the transactions contemplated by this Agreement, Purchaser will
acquire the IGXUK Shares free and clear of all covenants, conditions, restrictions, voting trust
arrangements, liens, claims, charges, encumbrances, options or rights of any other kind.
Shareholder has good and marketable title to the IGXUK Shares to be sold to Purchaser by
Shareholder pursuant to this Agreement free of all covenants, conditions, restrictions, voting
trust arrangements, liens, claims, charges, encumbrances, options or rights of any other kind.
3.10 Financial and Full Information. The Seller has delivered to Purchaser unaudited
financial statements for IGXUS and IGXUK covering the periods from January 1, 2009 until
September 30, 2012 (the “Financial Statements”), copies of which are attached hereto as
Exhibit 3.10. To Seller’s Knowledge, the Financial Statements have been prepared in
accordance with generally accepted accounting principles (“GAAP”), are true, correct and
complete in all material respects, and accurately, in all material respects, reflect the financial
position of the Seller and IGXUK for the periods set forth therein.
3.11 Absence of Undisclosed Liabilities. As of the date hereof and as of the Closing
Date, other than (a) Assumed Liabilities, and (b) Liabilities incurred in connection with the
consummation of the transactions contemplated by this Agreement and other Transaction
Documents, the Seller and IGXUK do not have and shall not have any indebtedness or other
Liability of any kind whatsoever, absolute, or contingent, that is not either (i) specifically
reflected on the Financial Statements, (ii) specifically set forth in a schedule to this Agreement or
(iii) otherwise specifically disclosed in writing to Purchaser in this Agreement. In addition,
other than (a) Assumed Liabilities, and (b) Liabilities incurred in connection with the
consummation of the transactions contemplated by this Agreement and other Transaction
Documents, all indebtedness and/or other Liabilities whatsoever (including trade payables) of
Seller are accurately reflected on Schedule 2.2(b)(2), and Seller has no indebtedness and/or other
Liabilities (including trade payables) whatsoever other than as set forth on Schedule 2.2(b)(2),
attached hereto.
3.12 Capitalization. Schedule 3.12 attached hereto accurately sets forth the authorized,
issued and outstanding shares of capital stock of IGXUK and the class, series and number of
such shares owned by Seller and/or Shareholder. All of the issued and outstanding shares of
capital stock of IGXUK has been duly authorized, are validly issued, fully paid and non-
assessable, are not subject to, nor were issued in violation of, any preemptive rights, and is
owned of record and beneficially by the parties set forth on Schedule 3.12. Except as may be set
forth on the Schedule 3.12, there are no outstanding or authorized options, warrants, rights,
contracts, calls, puts, rights to subscribe, conversion rights or other agreements or commitments
to which any of IGXUK, the Seller or the Shareholder is/are a party or which are binding upon
any of IGXUK, the Shareholder or the Seller providing for the issuance, disposition or
acquisition of any of IGXUK’s capital stock or other equity or any rights or interests exercisable
therefor. There are no voting trusts, proxies or any other agreements or understandings with
respect to the voting of the securities of IGXUK. Except as set forth on Schedule 3.12, IGXUK
is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or
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retire its capital stock. Shareholder is the beneficial and record owner of all of the outstanding
shares of capital stock of the IGXUK, free and clear of all Liens.
3.13 Governmental Licenses and Permits. Seller and IGXUK have all governmental
licenses and permits and other governmental authorizations and approvals (i) which are material
or necessary for the operation of the IGXUK’s and Seller’s IT Solutions Business and the use of
the Assets (in each case in accordance with past practice), or (ii) the lack of which would have a
Material Adverse Effect.
3.14 Business Records. All business records of the Seller and IGXUK have been
provided to Purchaser for review, are complete and correct in all material respects, and fairly
reflect the operations of the IT Solutions Business.
3.15 Insurance. Set forth on Schedule 3.15 is a true and complete list and description
of all insurance in force on the date hereof with respect to the Assets and/or the IT Solutions
Business of Seller and IGXUK together with a summary description of the hazards insured
against. To Seller’s Knowledge, such policies are in full force and effect with insurers and
copies thereof have been provided to Purchaser. There are no outstanding unpaid claims under
any such policy, and neither the Seller nor the Shareholder has any Knowledge of any notice of
cancellation or non-renewal of any such policy. To Seller’s Knowledge, there are and have been
no inaccuracies in any application for such policies, nor any failure to pay premiums thereon
when due. Neither the Seller nor the Shareholder has received any written notice from any of its
insurance carriers that any of Seller’s insurance premiums will be materially increased in the
future or that any insurance coverage will not be available to the Seller in the future on
substantially the same terms as now in effect. No such insurance policies call for any
retrospective premium adjustments. All such insurance policies are freely assignable by the
Seller to Purchaser without the consent of any party.
3.16 Operation of the IT Solutions Business. The Assets are sufficient to operate the
IT Solutions Business in accordance with past practice in all material respects. All of the Assets
of Seller and IGXUK are in good condition and repair (subject to ordinary wear and tear), and
have been maintained in accordance with appropriate manufacturer’s standards in all material
respects.
3.17 Absence of Certain Changes. Since October 19, 2012, the business of IGXUK
and Seller have been conducted in the ordinary course, and there has been no change in the
Seller’s or IGXUK’s authorized or issued securities, grant of any securities, option or right to
purchase securities of IGXUK or issuance of any security/securities convertible into capital
stock or other securities of IGXUK.
3.18 Employee Matters.
(a)
Schedule 3.18 contains a complete and correct list of all Employee Benefit
Plans (as defined below) and any other employee benefit arrangements or payroll practices,
including, without limitation, employment agreements, severance agreements, executive
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compensation arrangements, incentive programs or arrangements, sick leave, vacation pay,
severance pay policies, salary continuation for disability, consulting or other compensation
arrangements, workers’ compensation, retirement, deferred compensation, bonus, stock
purchase, hospitalization, medical insurance, life insurance, tuition reimbursement or scholarship
programs, any plans providing benefits or payments in the event of a change of control, change
in ownership, or sale of a substantial portion (including all or substantially all) of the assets of
the Seller and IGXUK, maintained by the Seller or IGXUK, as the case may be, to which the
Seller or IGXUK, as the case may be, has contributed or is obligated to make payments, in each
case with respect to any employees (or, if the Seller has any existing liability, former employees)
of the Seller and IGXUK (hereinafter, the “Employee Benefit Plans”). All Employee Benefit
Plans which constitute Employee Pension Plans (as defined below) (hereinafter, the “Employee
Pension Plans”) are separately listed on Schedule 3.18 of the Disclosure Schedules. The Seller,
IGXUK and its ERISA Affiliates do not and have never maintained or participated in any
Employee Benefit Plans which are: (a) subject to Title IV of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or the minimum funding requirements of Section
412 of the Code; (b) Multiemployer Plans (as defined below); (c) multiple employer plans
subject to Sections 4063 and 4064 of ERISA (“Multiple Employer Plans”); or (d) plant closing
benefit plans. As used in this Agreement, (i) “Employee Benefit Plan” shall have the meaning
ascribed to such term by Section 3(3) of ERISA, (ii) “Employee Pension Plan” shall have the
meaning ascribed to such term by Section 3(2) of ERISA, (iii) “ERISA Affiliate” shall refer to
any trade or business, whether or not incorporated, the employees of which, together with the
employees of the Seller and IGXUK, are treated as employed by a single employer under Section
414(b), (c), (m) or (o) of the Code, and (iv) “Multiemployer Plans” shall mean any
multiemployer plan as defined in Section 3(37) of ERISA to which the Seller, IGXUK or an
ERISA Affiliate has contributed or is or was obligated to make payments, in each case with
respect to any current or former employees of the Seller or IGXUK or an ERISA Affiliate before
the Closing Date.
(b)
Except as set forth on Schedule 3.18:
(i)
to Seller’s Knowledge, the Employee Pension Plans which are
“defined contribution plans” intended to qualify under Section 401 of the Code are so qualified
and the trusts maintained pursuant thereto are exempt from federal income taxation under
Section 501 of the Code, and nothing has occurred with respect to the operation of such plans
which could cause the loss of such qualification or exemption or the imposition of any material
liability, lien, penalty, or Tax under ERISA or the Code;
(ii)
true, correct and complete copies of the following documents, with
respect to the Employee Benefit Plans have been delivered to Purchaser: (A) all plan documents,
including trust agreements, insurance policies and service agreements and amendments thereto,
(B) the most recent Forms 5500 and any financial statements attached thereto and those for the
prior three years, (C) the last Internal Revenue Service determination letter, and the applications
and supporting disclosure documents submitted to the Internal Revenue Service with respect to
such determination letter, and all other correspondence or filings with a governmental agency or
entity including without limitation compliance program applications, (D) summary plan
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descriptions, (E) employee handbooks or manuals, and (F) the most recent actuarial written
descriptions of all non-written agreements relating to any such plan;
(iii) to Seller’s Knowledge, there are no pending Claims which have
been asserted or instituted by or against the Employee Benefit Plans, against the assets of any of
the trusts under such plans or by or against the plan sponsor, plan administrator, or any fiduciary
of the Employee Benefit Plans (other than routine benefit claims);
(iv)
to Seller’s Knowledge, all amendments and actions required to
bring the Employee Benefit Plans into conformity in all material respects with all of the
applicable provisions of ERISA, the Code and any other applicable laws (including the rules and
regulations thereunder) have been made or taken except to the extent that such amendments or
actions are not required by Law to be made or taken until a date after the Closing Date and are
disclosed on Schedule 3.18 (b)(iv);
(v)
to Seller’s Knowledge, the Employee Benefit Plans have been
maintained, in form and operation, in all material respects in accordance with their plan
documents and with all provisions of the Code and ERISA (including rules and regulations
thereunder) and other applicable Law, and none of the Shareholder, the Seller nor any “party in
interest” or “disqualified person” with respect to the Employee Benefits Plans has engaged in a
“prohibited transaction” within the meaning of Section 4975 of the Code or Title I, Part 4 or
ERISA;
(vi)
none of the Employee Benefit Plans contains any provisions which
would prohibit the transactions contemplated by this Agreement or which would give rise to any
severance, termination or other payments or liabilities, including without limitation any
acceleration in benefit vesting or distribution, as a result of the transactions contemplated by this
Agreement;
(c)
Attached hereto as Schedule 3.18(c) is a complete and correct list of (i) all
employee grievances during the last three (3) years and (ii) each person who, as of the date set
forth in such list, is employed by the Seller or IGXUK, including each active employee and each
employee classified as inactive as a result of disability, leave of absence, layoff or other absence.
With respect to such persons, such list includes the positions and the current wages for the most
recent payroll period. Schedule 3.18(c) also contains a description of all existing severance,
accrued vacation obligations or retiree benefits of any current or former director, officer,
employee or consultant of the Seller. The employment or consulting arrangements of Seller with
all such persons are terminable at will. The Seller has not made any written or oral agreement
with or promise to any employee, officer or consultant regarding continued employment by the
Purchaser after the Closing Date;
(d)
To Seller’s Knowledge, as of the Closing, IGXUK complies in all material
respects, and prior to the Closing IGXUK has complied in all material respects, with its
obligations under the laws of England and Wales in respect of the provision of Employee Benefit
Plans and Employee Pension Plans.
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3.19 Environmental Matters.
(a)
The Seller and IGXUK have not released, emitted, buried or otherwise
disposed of Regulated Substances (as hereinafter defined), in material violation of
Environmental Laws, on any property, including any real property the leasehold interest of
which is included in the Assets (each a “Property” and together the “Properties”). The Seller
and IGXUK have complied, in all material respects, with all Environmental Laws (as hereinafter
defined) applicable to Seller and IGXUK pertaining to the use, ownership, and operation of the
Properties.
(b)
As used in this Agreement: (i) “Environmental Law” means any statute,
regulation, rule, code, common law, order or judgment of any applicable federal, state, local or
foreign jurisdiction relating to pollution, hazardous substances, hazardous wastes, petroleum or
otherwise relating to protection of the environment, natural resources or human health,
including, by way of example and not by way of limitation, the Clean Air Act, the Clean Water
Act, the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive
Environmental Response Compensation and Liability Act (“CERCLA”), the Toxic Substances
Control Act (“TSCA”), and the Emergency Planning and Community Right-to-Know Act, all as
currently amended; (ii) “Regulated Substances” means any substance regulated under
Environmental Laws, including but not limited to hazardous waste, as defined pursuant to
RCRA, hazardous substances, as defined pursuant to CERCLA, toxic substances as defined
under TSCA, hazardous materials, as defined under the Hazardous Materials Transportation Act,
petroleum and its fractions, ACM’s and PCB’s; and (iii) “the Seller” includes any predecessors
or affiliates of the Seller.
3.20 Property.
(a)
Neither the Seller nor IGXUK owns any real property. Schedule 3.20 lists
as of the date hereof all written leases, subleases, licenses, rental or occupancy agreements and
other agreements (including all amendments) to lease, sublease, license or otherwise occupy or
permit occupancy of, and describes all oral leases, subleases, licenses, rental or occupancy
agreements pursuant to which Seller leases, subleases, licenses, or otherwise rents or occupies or
has agreed to lease, sublease, license or otherwise occupy or permit occupancy of, any real
property (“Leases”).
(b)
All of the Leases are valid and in full force and effect, enforceable against
either the Seller or IGXUK, and, to Seller’s and Shareholder’s Knowledge, against the other
parties thereto (except, in each case, to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights in general and subject to general principles of equity and the discretion of courts
in granting equitable remedies); and have not been assigned, modified, supplemented or
amended other than as disclosed by Seller or Shareholder to Purchaser. The Seller and
Shareholder have delivered to the Purchaser true and complete copies of all of the Leases, all
amendments thereto, and all material correspondence related thereto, including all
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correspondence pursuant to which any party to any of the Leases declared a default thereunder or
provided notice of the exercise of any option granted to such party under such Lease.
(c)
Intentionally Omitted.
(d)
Neither the Shareholder nor the Seller has received any notice that any of
the Property, or the use, occupancy or operation thereof violates any governmental requirements
or deed or other title covenants or restrictions.
(e)
Intentionally Omitted.
(f)
There are no parties other than the Seller, Shareholder or IGXUK in
possession of any of the Property or any portion thereof, and there are no leases, subleases,
licenses, concessions or other agreements, written or oral, granting to any party or parties other
than the Seller or IGXUK, the right of use or occupancy of any of the Property or any portion
thereof other than the Leases.
3.21 Intellectual Property.
(a)
Schedule 3.21(a) contains a true and complete list of the Intellectual
Property, and includes details of all due dates for further filings, maintenance and other
payments or other actions falling due in respect of the Intellectual Property within twelve (12)
months following the Closing Date, and the current status of the corresponding registrations,
filings, applications and payments. All of the registrations and applications arising from or
relating to the Intellectual Property are and remain valid and subsisting, in good standing, with
all fees, payments and filings due as of the Closing Date duly made, and the due dates specified
on Schedule 3.21(a) are accurate and complete in all material respects. All of these registrations
and applications are enforceable. The Seller, Shareholder and IGXUK have delivered correct
and complete copies of all of these registrations and applications, and has made available for
review correct and complete copies of all other written documentation evidencing ownership of
each of the foregoing. The Seller has made all other registrations relating to the IT Solutions
Business that it is required to have made and is in good standing with respect to such
registrations with all fees due as of the Closing duly made.
(b)
The Intellectual Property consists solely of items and rights that are: (1)
owned by either the Seller or IGXUK; (2) in the public domain; or (3) rightfully used by either
the Seller or IGXUK pursuant to a valid license, sublicense, consent or other similar written
agreement (the “Licensed Intellectual Property”). The parties and date of each such agreement
regarding the Licensed Intellectual Property are set forth on Schedule 3.21(b). To the Seller’s
and Shareholder’s Knowledge, the Seller and IGXUK each have all rights in the Intellectual
Property reasonably necessary and reasonably sufficient to carry out the Seller’s and IGXUK’s
current activities and proposed activities relating to the IT Solutions Business (and had all rights
necessary to carry out its former activities at the time such activities were being conducted),
including and to the extent required to carry out such activities, rights to make, use, reproduce,
modify, adapt, create derivative works based on, translate, distribute (directly and indirectly),
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transmit, display and perform publicly, license, rent and lease and, as applicable, assign and sell,
the Intellectual Property. The Seller and Shareholder each have delivered correct and complete
copies of all material license agreements to the Purchaser, and, as applicable, has made available
for review correct and complete copies of all other written documentation evidencing that the
Seller and/or IGXUK have rights in each of the foregoing.
(c)
To Seller’s and Shareholder’s Knowledge, neither the Seller nor IGXUK
have infringed upon or misappropriated any Intellectual Property Rights or personal right of any
person anywhere in the world. No Claims or written notice (1) challenging the validity,
effectiveness or ownership by the Seller of any of the Intellectual Property, or (2) to the effect
that the use, distribution, licensing, sublicensing, sale or any other exercise of rights in any
product, service, work, technology or process as now used or offered or proposed for use,
licensing, sublicensing, sale or other manner of commercial exploitation by either the Seller or
IGXUK infringes or will infringe on any Intellectual Property Rights or personal right of any
Person have been asserted or, to Seller’s Knowledge, are threatened by any Person. To Seller’s
and Shareholder’s Knowledge, there is and has been no unauthorized use, infringement or
misappropriation of any Intellectual Property by any third party, employee or former employee.
(d)
The Seller and IGXUK are not, nor as a result of the execution or delivery
of this Agreement, or performance of the Seller’s obligations hereunder, will the Seller or
IGXUK, be, in violation of any license, sublicense, agreement or instrument relating to the
Intellectual Property to which the Seller or IGXUK is a party or otherwise bound, nor will
execution or delivery of this Agreement, or performance of the Seller’s obligations hereunder,
cause the diminution, termination or forfeiture of any Intellectual Property or any rights therein
or thereto.
(e)
The Intellectual Property is free and clear of any and all Liens (other than
Permitted Liens).
(f)
The Seller and IGXUK do not owe any royalties, license fees, guaranteed
maintenance fees or other payments to third parties in respect of the Intellectual Property. All
royalties, license fees, guaranteed maintenance fees or other payments that have accrued, or will
accrue, prior to the Closing have been paid or will be paid prior to Closing. The Seller and
IGXUK will not owe any such payments or any additional payments as a result of the
consummation of the transactions contemplated hereby.
3.22 Contracts.
(a)
Schedule 3.22(a) sets forth a list of all Contracts to which the Seller and
IGXUK are a party or by which the Seller, IGXUK, the IT Solutions Business or any of the
Assets is bound as of the date hereof including:
(1)
any Contract for IGXUK’s or the Seller’s provision of engineering
or other services related to the IT Solutions Business;
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(2)
any continuing Contract for management or consulting services or
services of independent contractors or subcontractors;
(3)
any Contract that expires more than one year after the date of this
Agreement and any Contract that may be renewed at the option of any person other than the
Seller so as to expire more than one year after the date of this Agreement;
(4)
any trust indenture, mortgage, promissory note, loan agreement or
other Contract for the borrowing of money, any currency exchange, commodities or other
hedging arrangement or any leasing transaction of the type required to be capitalized in
accordance with GAAP;
(5)
any Contract for capital expenditures in excess of $5,000 (or, if
applicable, the sterling or Euro equivalent) in the aggregate;
(6)
any Contract limiting the freedom of the Seller to engage in any
line of business or to compete with any other Person, or any confidentiality, secrecy or non-
disclosure contract or any contract that may be terminable as a result of the Seller’s status as a
competitor of any party to such contract;
(7)
any Contract pursuant to which the Seller is a lessor of any
Tangible Personal Property, pursuant to which payments in excess of $5,000 remain outstanding;
(8)
any Contract with an affiliate;
(9)
any agreement of guarantee, support, indemnification, assumption
or endorsement of, or any similar commitment with respect to, the Liabilities of any other Person
other than customary customer agreements made in the ordinary course of the IT Solutions
Business;
(10) any employment Contract, arrangement or policy (including any
collective bargaining contract or union agreement) that may not be immediately terminated
without financial notifications or penalty (or any augmentation or acceleration of benefits);
(11) any Contract providing for a joint venture or partnership with any
other Person;
(12) any oral contract, true and correct summaries of which have been
provided to the Seller; and
(13) any Contract that is otherwise in any way material to the Assets
and/or the IT Solutions Business and is not described in any of the categories specified in this
Section 3.22(a).
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(b)
The Seller and IGXUK have performed, in all material respects, all of the
obligations required to be performed by either and, to Seller’s Knowledge, are entitled to all
benefits under, and, to Seller’s Knowledge, are not alleged to be in default in respect of any
Assigned Contract (or, with respect to IGXUK, any Contract described in Section 3.22(a) to
which IGXUK is a party (each an “IGXUK Contract”)). Each of the Assigned Contracts and
IGXUK Contracts is valid and binding and in full force and effect (subject to bankruptcy,
reorganization, receivership and other laws affecting creditors’ rights generally and applicable
equitable principles (whether considered in a proceeding at law or in equity)), and except as
disclosed on Schedule 3.22(b), to Seller’s Knowledge, there exists no default or event of default
or event, occurrence, condition or act, with respect to the Seller or IGXUK, or with respect to the
other contracting party, that, with the giving of notice, the lapse of time or the happening of any
other event or condition, would become a default or event of default under any Assigned
Contract or any IGXUK Contract. Neither the Seller nor IGXUK has received written or oral
notice of cancellation, modification or termination of any Assigned Contract or IGXUK
Contract. Seller and IGXUK do not have actual notice that one or more of the parties to any
Assigned Contract or IGXUK Contract intends to terminate or alter the provisions thereof by
reason of the transactions contemplated hereby. Since the date of the latest balance sheet of the
Seller contained in the Financial Statements, except as set forth on Schedule 3.22(b), neither the
Seller nor IGXUK has waived any right under any Assigned Contract or IGXUK Contract,
amended or extended any Assigned Contract or IGXUK Contract or failed to renew (or received
notice of termination or failure to renew with respect to) any Assigned Contract or IGXUK
Contract. True, correct and complete copies of all Assigned Contracts and IGXUK Contracts
have been delivered to the Purchaser.
(c)
Schedule 3.22(a) denotes with an asterisk all of the Contracts (if any) that
will be Excluded Contracts.
(d)
None of the Assigned Contracts was awarded to the Seller or IGXUK as a
result of (in whole or in part) IGXUK or the Seller’s status as a minority-owned or
disadvantaged business or similar status.
(e)
All of the Assigned Contracts may be assigned to the Purchaser without
obtaining the consent of any party thereto, other than to the extent specifically set forth on
Schedule 3.22(e).
3.23 Taxes and Tax Returns.
(a)
Except as set forth on Schedule 3.23:
(1)
The Seller has timely filed or timely requested extensions to file
those Tax Returns that are currently due for all taxable periods ending on or before the Closing
Date and all such Tax Returns are true, correct and complete. Quarterly Value Added Tax
Returns for IGXUK have consistently been submitted late but this has not given rise to any
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penalties as the returns have always shown a repayment position. Copies of all such Tax Returns
for the periods ending on or after December 31, 2004 have been given to the Purchaser;
(2)
The Seller and IGXUK have paid to the appropriate Governmental
Authority, or has established, in accordance with GAAP and consistent with past practice,
accruals that are reflected on the Seller’s financial statements (as provided to the Purchaser
hereunder) for the payment of all Taxes imposed on the Seller or for which the Seller could be
liable, whether to taxing authorities or to other persons (pursuant to a tax sharing agreement or
otherwise) for all taxable periods beginning on or before the Closing Date;
(3)
No extension of time has been requested or granted for the Seller
and/or IGXUK to file any Tax Return that has not yet been filed or to pay any Tax that has not
yet been paid;
(4)
The Seller and IGXUK have not received notice of a determination
by a Governmental Authority that Taxes are owed by the Seller (such determination to be
referred to as a “Tax Deficiency”) that has not been resolved as of the date of Closing and, to
the Seller’s Knowledge, no Tax Deficiency is proposed or threatened;
(5)
All Tax Deficiencies have been paid or finally settled and all
amounts determined by settlement to be owed have been paid;
(6)
Except in the case of a Lien for ad valorem property taxes not yet
due and payable, there is no unpaid Tax (a) that constitutes a Lien upon any of the Assets or (b)
for which the Purchaser would be liable under applicable Law by reason of having acquired the
Assets;
(7)
There are no presently outstanding waivers or extensions or
requests for waiver or extension of the time within which a Tax Deficiency may be asserted or
assessed;
(8)
No issue has been raised in any examination, investigation, audit,
Claim or proceeding relating to Taxes (a “Tax Audit”) which, by application of similar
principles to any past, present or future period, would result in a Tax Deficiency for such period
and no Claim has ever been made by a Governmental Authority in a jurisdiction where the Seller
does not file Tax Returns that it is or may be subject to taxation by that jurisdiction;
(9)
There are no pending or, to the Seller’s Knowledge, threatened,
Tax Audits of the Seller and except for a pending audit of the operation of IGXUK PAYE on
employees arranged for February 2013, IGXUK there are no pending or, to the Shareholder’s
Knowledge, threatened, Tax Audits of IGXUK;
(10) To Seller’s Knowledge, there are no requests for rulings in respect
of any Tax pending between the Seller or IGXUK and any Governmental Authority;
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(11) To Seller’s Knowledge, the Seller and IGXUK have complied with
all applicable Laws in all material respects relating to the withholding and payment of Taxes and
has timely withheld and paid to the proper Governmental Authorities all amounts required to
have been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor or shareholder;
(12) To Seller’s Knowledge, the Seller and IGXUK have disclosed on
its federal income Tax Returns all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Section 6662 of the Code;
(13) Intentionally omitted;
(14) To Seller’s Knowledge, none of the Assets of the Seller and
IGXUK is property that it is required to be treated as being owned by any other person pursuant
to the “safe harbor lease” provisions of former Section 168(f)(8) of the Code;
(15) None of the Assets of the Seller and IGXUK directly or indirectly
secures any debt, the interest on which is tax-exempt under Section 103(a) of the Code;
(16) None of the Assets of the Seller and IGXUK is “tax-exempt use
property” within the meaning of Section 168(h) of the Code;
(17) The Seller does not have, and has not had, a permanent
establishment in any foreign country, as defined in any applicable tax treaty or convention
between the United States and such foreign country; and
(18) Neither the Seller nor IGXUK are a party to any Tax allocation or
Tax sharing agreement
(b)
Schedule 3.23 contains: (1) a schedule of the filing dates of all Tax
Returns required to be filed by the Seller and/or IGXUK; (2) a description of all past Tax Audits
involving the Seller and/or IGXUK; and (3) a list of the states, territories and jurisdictions
(whether foreign or domestic) to which any Tax is properly payable by either the Seller or
IGXUK. Except as set forth on Schedule 3.23, to Seller’s Knowledge, the Seller and IGXUK
have retained all supporting and backup papers, receipts, spreadsheets and other information
reasonably necessary for: (A) the preparation of all Tax Returns that have not yet been filed; and
(B) the defense of all Tax Audits involving taxable periods either ending on or during the six
years prior to the Closing Date or from which there are unutilized net operating loss, capital loss
or investment tax credit carryovers.
(c)
To Seller’s Knowledge, the Seller and IGXUK have collected and
remitted to the appropriate Governmental Authority all sales and use or similar Taxes required to
have been collected, including any interest and any penalty, addition to tax or additional amount
unpaid, and has been furnished properly completed exemption certificates for all exempt
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transactions. To Seller’s Knowledge, the Seller and IGXUK have collected and/or remitted to
the appropriate Governmental Authority all property Taxes, customs duties, fees, and
assessments which are other than in the nature of income taxes or charge of any kind whatsoever
(including Taxes assessed to real property and water and sewer rents relating thereto), including
any interest and any penalty, addition to tax or additional amount unpaid.
3.24 Solvency. No insolvency proceeding of any character including bankruptcy,
receivership, reorganization, composition or arrangement with creditors, voluntary or
involuntary, affecting, the Seller or IGXUK (other than as a creditor) or any of the Assets are
pending or are being contemplated by the Seller or IGXUK, or, to Seller’s Knowledge, are being
threatened against the Seller or IGXUK by any other Person, and the Seller and IGXUK have not
made any assignment for the benefit of creditors or taken any action in contemplation of which
that would, to Seller’s Knowledge, constitute the basis for the institution of such insolvency
proceedings. Immediately after giving effect to the consummation of the transactions
contemplated hereby, (a) the Seller will be able to pay the Excluded Liabilities as they become
due; (b) the value of the remaining assets (if any) of the Seller (calculated at fair market value)
will exceed the Excluded Liabilities; and (c) taking into account all pending and threatened
litigation of which Seller has Knowledge, final judgments against the Seller in actions for money
damages are not reasonably anticipated to be rendered at a time when, or in amounts such that,
the Seller will be unable to satisfy any such judgments promptly in accordance with their terms
(taking into account the maximum probable amount of such judgments in any such actions and
the earliest reasonable time at which such judgments might be rendered) as well as all other
obligations of the Seller.
3.25 Sufficiency of Acquired Assets. To the best of Seller’s and Shareholder’s
Knowledge, the Assets along with IGXUK’s assets constitute all of the assets, tangible and
intangible, of any nature whatsoever, reasonably necessary to operate the IT Solutions Business
in accordance with IGXUK’s and Seller’s past practices, and include all of the operating assets
of Seller (other than Excluded Assets).
3.26 Affiliate Transactions. No officer, manager, member, director, employee or
affiliate of IGXUK or the Seller (other than the Key Seller Employee) or any entity in which any
such entity or individual is an officer, director, manager or the owner of five percent (5%) or
more of the beneficial ownership interests, is a party to any contract (written or oral) with
IGXUK or the Seller, or has any interests in any property used in the IT Solutions Business or
has any claim or right against the Seller, or IGXUK, other than, with respect to officers,
directors and managers, agreements relating to their employment by IGXUK or the Seller
(including without limitation employment, confidentiality, and inventions agreement), and with
respect to members, relating to their respective membership interests in IGXUK or the
Seller. Each affiliate transaction, if any, was effected on terms equivalent to those which would
have been established in an arm’s-length negotiation. None of the Seller, IGXUK or any of its
affiliates has any direct or indirect interest in any competitor of the Seller or IGXUK, except for
passive ownership of less than five percent (5%) of the outstanding capital stock of any
competing business that is publicly traded on any recognized exchange or in the over-the-counter
market.
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3.27 Securities Act Acknowledgements, Representations, Warranties and Covenants.
(a)
Acknowledgments. Shareholder agrees and acknowledges that: (1) no
federal or state agency has made any finding or determination as to the fairness of the
distribution of the Shares for investment, or any recommendation or endorsement of the Shares;
(2) the Shares have not been registered under the Securities Act of 1933, as amended (the “Act”),
or the securities acts of any state and, as a result, the Shareholder must bear the economic risk of
the investment indefinitely because the Shares may not be sold unless subsequently registered
under the Act and the securities laws of any appropriate states or an exemption from such
registration is available, and that such registration under the Act and the securities laws of any
such states is unlikely at any time in the future; (3) iGambit does not have any present intention
and is under no obligation to register the Shares, whether upon initial issuance or upon any
transfer thereof under the Act and applicable state securities laws, and Rule 144 and/or Rule 145
may not be available as a basis for exemption from registration; and (4) unless and until
registered under the Act, all certificates evidencing the Shares, whether upon initial issuance or
upon any transfer thereof, will bear a legend, prominently stamped or printed thereon, reading
substantially as follows:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES
MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO
AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS.”
(b)
Representations, Warranties and Covenants. (1) The Shares are being
acquired for the Shareholder’s own account for investment and not for distribution or resale to
others and the Shareholder will not sell or otherwise transfer the Shares, whether by dividend or
other distribution or upon liquidation or dissolution or otherwise, unless they are registered
under the Act and the securities acts of any appropriate state or unless an exemption from such
registration is available and iGambit is satisfied that such exemption is available; (2) the
acquisition of the Shares by the Shareholder hereunder is consistent with its general investment
objectives and the Shareholder understands that the acquisition of the Shares is a speculative
investment involving a high degree of risk, including the risk of total loss of such investment,
and there is now no established market for iGambit’s capital stock and there is no assurance that
any public market for such stock will develop; (3) the Shareholder has adequate means of
providing for his current needs and possible personal contingencies and he has no need for
liquidity in this investment and can bear the risk of losing his entire investment in the Shares; (4)
iGambit has made available to the Shareholder at a reasonable time prior to its investment the
opportunity to ask questions and receive answers concerning the Shares and to obtain any
additional information which iGambit possesses or can acquire without unreasonable effort or
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expense that is necessary in connection with the investment but the Shareholder agrees and
acknowledges, however, that he has relied solely upon this Agreement and his own independent
investigation in making the decision to invest in the Shares; (5) the Shareholder understands that
the distribution of the Shares is limited solely to “accredited investors,” as that term is defined
under Regulation D of the Securities Act and the Seller is an “accredited investor” (as so
defined); (6) the Shareholder is a sophisticated investor and has such knowledge and experience
in financial and business matters that he is capable of understanding the merits and risks inherent
in the proposed acquisition of the Shares; (7) the Shareholder is acquiring the Shares without
having been furnished any specific offering literature or prospectus but has relied generally upon
information filed by iGambit with the Securities and Exchange Commission and acknowledges
that no representations or warranties have been made to the Shareholders or his representatives
by iGambit or the Purchaser, or any officer, employee, agent or affiliate of iGambit or the
Purchaser other than as contained in this Agreement and the Shareholder must independently
seek advice from its own tax and other advisor(s) and is not relying on any tax or other advice
received from iGambit or the Purchaser in connection with the transactions contemplated by this
Agreement; and (8) the Shareholder has neither relied upon nor seen any form of advertising or
general solicitation in connection with the distribution of the Shares.
4.
POST-CLOSING COVENANTS OF THE PARTIES.
4.1
Change of Corporate Name or Discontinuance of Seller Corporation. Immediately
subsequent to the Closing, the Seller acknowledges and agrees that Seller shall (i) change the
name of IGXUS to something that does not contain the phrase “Igxglobal” or any derivation
thereof, and thereafter neither the Seller, the Shareholder nor any affiliate, shall use such name or
any confusingly similar name at any time subsequent to the Closing or (ii) file a Certificate of
Dissolution of IGX Global Inc. with the New Jersey Secretary of State.
4.2
Employees. The Seller shall undertake good faith efforts to cause the Seller’s
employees to become employees of the Purchaser subsequent to the Closing, but the parties
hereto acknowledge and agree that, except for the Purchaser’s obligation to employ the Key
Seller Employee pursuant to the Employment Agreements, the Purchaser shall have no
obligation whatsoever to hire any such employee.
4.3
Further Assurances. Upon the reasonable request of any party at any time after the
Closing, the other parties shall promptly execute and deliver such documents and instruments
and take such additional action as the requesting party may reasonably request to effectuate the
purposes of this Agreement.
4.4
Company Books and Records. For a period of five (5) years from the Closing,
Purchaser shall provide to Seller, Shareholder and their representatives, upon reasonable advance
written notice during regular business hours, reasonable access to the properties and books and
records relating to the IT Solutions Business, to the extent such access may reasonably be
required by Seller or Shareholder in connection with matters related to or affected by the
operation of the IT Solutions Business prior to the Closing, and Seller, Shareholder and their
representatives shall have the right, at their own expense, to make copies of any such records or
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files provided, however, that any such access or copying shall be subject the appropriate
Purchaser’s reasonable confidentiality precautions, and shall be done in such a manner as not to
interfere unreasonably with the normal conduct of the business of Purchaser.
4.5
Litigation Support. In the event and for so long as any party actively is contesting
or defending against any action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand in connection with any fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or transaction prior to the
Closing Date involving the IT Solutions Business, the Assets, the Excluding Liabilities, the
Assumed Liabilities, Purchaser, Shareholder, iGambit, IGXUK or Seller (other than adversary
proceedings between or among Purchaser and/or iGambit, on the one hand, and Seller and/or
Shareholder, on the other hand), each of the parties, as applicable, shall (a) reasonably cooperate
with the contesting or defending party and its counsel, (b) as applicable, make reasonably
available their employees to provide testimony, to be deposed, to act as witnesses and to assist
counsel, and (c) provide reasonable access to its books and records as shall be necessary in
connection with the defense or contest; provided that the contesting or defending party shall pay
the out-of-pocket expenses reasonably incurred by the party so cooperating (unless the
contesting or defending party is entitled to indemnification from such party under Section 6).
4.6
Taxes.
(a)
In order to apportion appropriately any Tax relating to a period that begins before
the Closing Date and ends after the Closing Date, Taxes that are based upon or related to income
or any sales or use Tax shall be allocable based upon a closing of the books accounting method,
and any other Taxes shall be allocable in proportion to the number of days in the period prior to
and including the Closing Date, and the number of days in the period following the Closing
Date.
(b)
To the extent that, following the Closing, Seller or Shareholder is required to pay
Taxes included in the Assumed Liabilities, Seller and/or Shareholder shall provide Purchaser
with documentation and information reflecting such Tax, and Purchaser and/or iGambit shall
timely pay to Seller and/or Shareholder the amount of such Tax due. To the extent that,
following the Closing, Purchaser or iGambit is required to pay Taxes included in the Excluded
Liabilities, Purchaser shall provide Seller with documentation and information properly
reflecting such Tax, and Seller and/or Shareholder shall timely pay to Purchaser and/or iGambit
the amount of such Tax due.
(c)
The parties shall (i) each provide the other with such assistance as may
reasonably be requested by any of them in connection with the preparation of any return, audit,
or other examination by any Taxing authority or judicial or administrative proceedings relating
to Liability for Taxes, (ii) each retain and provide the other with any records or other information
that may be relevant to such return, audit or examination, proceeding or determination, and (iii)
each provide the other with any final determination of any such audit or examination,
proceeding, or determination that affects any amount required to be shown on any Tax Return of
the other for any period. Without limiting the generality of the foregoing, Purchaser and Seller
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shall each retain, until the applicable statutes of limitations (including any extensions) have
expired, copies of all Tax Returns, supporting work schedules, and other records or information
that may be relevant to such returns for all Tax periods or portions thereof ending on or before
the Closing Date.
5.
REPRESENTATIONS AND WARRANTIES OF
PURCHASER
AND
iGAMBIT.
Purchaser and iGambit hereby jointly and severally represents and warrants to the
Seller and the Shareholder, that the following representations and warranties are true and correct
in all material respects on the date hereof and will be true and correct in all material respects on
and as of the Closing Date:
5.1
Organization and Good Standing. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware and has full power
to carry on its business as it is now being conducted and to own or hold under lease the
properties it now owns or holds under lease. iGambit is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has full power to carry
on its business as it is now being conducted and to own or hold under lease the properties it now
owns or holds under lease.
5.2
Authority. Each of Purchaser and iGambit has full power and authority to enter
into this Agreement. Purchaser and its members, officers and directors have taken all action
necessary to authorize the execution, delivery and performance of this Agreement, the
completion of the transactions contemplated hereby and the execution and delivery of any and all
instruments necessary or appropriate to effectuate fully the terms and conditions of this
Agreement. This Agreement has been properly executed and delivered by Purchaser and
iGambit, and (assuming the due authorization, execution and delivery thereof by the Seller and
the Shareholder) constitutes the valid and legally binding obligation of Purchaser and iGambit,
and is enforceable against Purchaser and iGambit in accordance with its terms.
5.3
No Conflict. Neither the execution and delivery of this Agreement nor the
carrying out of the transactions contemplated hereby will result in any violation, termination or
modification of, or conflict with, the articles of organization, certificate of incorporation or by-
laws of Purchaser or iGambit or any of the contracts or other instruments to which Purchaser or
iGambit is a party, or of any judgment, decree or order applicable to Purchaser or iGambit.
5.4
Broker’s and Finder’s Fees. Except for ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
Company Inc., no broker, finder, agent, representative or similar intermediary has acted as a
broker for or on behalf of the Purchaser or iGambit in connection with this Agreement or the
transactions contemplated hereby, and no broker, finder, agent or similar intermediary is entitled
to a Broker’s Fee in connection herewith, based on any agreement or understanding with
Purchaser or iGambit or any action taken by Purchaser or iGambit. Any such Broker’s Fee
based on any agreement or understanding with Purchaser or iGambit or any action taken by
Purchaser or iGambit which may be due in connection with the purchase and sale contemplated
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by this Agreement will be borne by the Purchaser or iGambit who has entered into the agreement
to pay.
5.5
Valid Issuance of Shares. The Shares, when issued, sold and delivered in
accordance with the terms and for the consideration set forth in this Agreement, will be validly
issued, fully paid and free of restrictions on transfer other than applicable state and federal
securities laws and Liens created by or imposed by the Shareholder. Assuming the accuracy of
the representations of the Shareholder in Section 3.26 of this Agreement, the Shares will be
issued in compliance with all applicable federal and state securities laws. The Shares have been
duly reserved for issuance, and upon issuance, will be validly issued, fully paid and free of
restrictions on transfer other than restrictions on transfer under applicable federal and state
securities laws and Liens created by or imposed by the Shareholder. Based in part upon the
representations of the Shareholder in Section 3.26 of this Agreement, the Shares will be issued in
compliance with all applicable federal and state securities laws. No Person has any preemptive
rights or rights of first refusal by reason of or in connection with the issuance of any Shares.
5.6
Litigation. There are no Claims pending or, to the knowledge of Purchaser or
iGambit, threatened against Purchaser or iGambit which seek to enjoin or rescind the
transactions contemplated by this Agreement or otherwise prevent Purchaser or iGambit from
complying with the terms and provisions of this Agreement.
5.7
Availability of Financing; Solvency. As of the Closing, Purchaser will have all
funds necessary to perform its obligations hereunder. Upon consummation of the Closing, and
after giving effect to the Closing, Purchaser will be solvent, and will have funds in an amount
sufficient to enable Purchaser to consummate the transactions contemplated by this Agreement
and any Transaction Documents and to perform all of its obligations hereunder and thereunder.
5.8
Limitation on Warranties. Neither iGambit nor Purchaser has any knowledge that
(a) any of the representations and warranties of Seller or Shareholder in this Agreement and the
Schedules are not true and correct in all material respects or (b) there are any material errors in,
or material omissions from, the Schedules.
6.
INDEMNIFICATION AND SURVIVAL.
6.1
Indemnification by the Seller and the Shareholder. Subject to the other provisions
of this Section 6, the Seller and the Shareholder hereby covenant and agree to jointly and
severally indemnify and hold harmless the Purchaser and its respective successors and assigns, at
all times from and after the date of Closing, against and in respect of any and all demands,
Claims, causes of action, administrative orders and notices, losses, costs, fines, liabilities,
penalties, interest, damages and expenses (including, without limitation, reasonable attorney
fees and expenses) (“Losses”), resulting from, in connection with or arising out of:
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(i)
any damage or loss resulting from any misrepresentation, breach of
warranty or breach or non-fulfillment of any agreement or covenant on the part of the
Seller or either Shareholder under (A) this Agreement, including Seller and Shareholder
covenants and representations the Excluded Liabilities, operation of Seller and IGXUK
prior to Closing, (B) the Assignments, or (C) any Employment Agreement to which
Seller or Shareholder is a party, or from any inaccuracy or misrepresentation in or
omission from any certificate or other instrument or document furnished or to be
furnished by or on behalf of IGXUK, the Seller or the Shareholder at Closing;
(ii)
all Claims, assessments, judgments, costs, reasonable attorneys’ fees and
expenses of any nature incident to any of the matters indemnified against pursuant to this
Section 6.1, including, without limitation, all such costs and expenses incurred in the
defense thereof or in the enforcement of any rights of the Purchaser hereunder.
6.2
Indemnification by Purchaser. The Purchaser and iGambit hereby covenants and
agrees to jointly and severally indemnify and hold harmless the Seller and the Shareholder and
their respective successors and assigns, at all times from and after the date of Closing against and
in respect of any and all Losses resulting from, in connection with or arising out of:
(i)
any misrepresentation, breach of warranty or breach or non-fulfillment of
any agreement or covenant on the part of the Purchaser or iGambit under (A) this
Agreement (including Purchaser’s and iGambit’s covenants and representations) or (B)
any Employment Agreement to which Purchaser or iGambit is a party, or from any
inaccuracy or misrepresentation in or omission from any certificate or other instrument or
document furnished or to be furnished by or on behalf of Purchaser or iGambit at
Closing;
(ii)
any Assumed Liability;
(iii) all Claims, assessments, judgments, costs, reasonable attorneys’ fees and
expenses of any nature incident to any of the matters indemnified against pursuant to this
Section 6.2, including, without limitation, all such costs and expenses incurred in the
defense thereof or in the enforcement of any rights of the Seller or the Shareholder
hereunder; and/or
(iv)
the operation or ownership of the IT Solutions Business after the Closing,
except to the extent a Purchaser is indemnified pursuant to Section 6.1 hereof.
6.3
Notice and Defense.
(a)
If at any time a party entitled to indemnification hereunder (the “Indemnitee”)
shall receive notice from any third party of any asserted Loss claimed to give rise to
indemnification hereunder, the Indemnitee shall promptly give notice thereof (“Claims Notice”)
to the party obligated to provide indemnification (the “Indemnitor”) of such Loss. The Claims
Notice shall set forth a brief description of the Loss, in reasonable detail, and, if known or
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reasonably estimable, the amount of the Loss that has been or may be suffered by the
Indemnitee. The failure of the Indemnitee to give a Claims Notice promptly shall not waive or
otherwise affect the Indemnitor’s obligations with respect thereto, except to the extent that the
Indemnitor is prejudiced as a result of such failure (or to the extent the associated claim is barred
by another provision hereof regarding any survival period). All indemnity claims by the
Indemnitee shall be bona fide. Any claim for indemnification with respect to any of such matters
which is not asserted by a notice given as herein provided specifically identifying the particular
breach underlying such claim and the reasonable detail of facts and Losses relating thereto
within the specified periods of survival may not be pursued until and unless properly made, and
if regarding a representation or warranty, within the applicable survival period as set forth in
Section 6.10. Thereafter, the Indemnitor shall have, at its election, the right to compromise or
defend any such matter at the Indemnitor’s sole cost and expense through counsel chosen by the
Indemnitor and approved by the Indemnitee (which approval shall not unreasonably be
withheld); provided, however, that (i) Indemnitor provides evidence reasonably satisfactory to
Indemnitee that Indemnitor has the financial wherewithal to satisfy and discharge the Loss in
full, and (ii) any such compromise or defense shall be conducted in a manner which is reasonable
and not contrary to the Indemnitee’s interests, and the Indemnitee shall in all events have a right
to veto any such compromise or defense which is unreasonable or which would jeopardize in any
material respect any assets or business of the Indemnitee or any of its affiliates or increase the
potential liability of, or create a new liability for, the Indemnitee or any of its affiliates and,
provided further that the Indemnitor shall in all events indemnify the Indemnitee and its affiliates
against any damage resulting from the manner in which such matter is compromised or
defended, including any failure to pay any such claim while such litigation is pending.
Notwithstanding the foregoing, if the Indemnitor receives a firm offer to settle a third party
Claim, and the Indemnitor desires to accept such offer, the Indemnitor will give written notice to
the Indemnitee to that effect. In the event that the Indemnitor does so undertake to compromise
and defend a claim, the Indemnitor shall notify the Indemnitee of its intention to do so. Each
party agrees in all cases to use commercially reasonable efforts to cooperate with the defending
party and its counsel in the compromise of or defending of any such liabilities or claims. In
addition, the nondefending party shall at all times be entitled to monitor such defense through the
appointment, at its own cost and expense, of advisory counsel of its own choosing.
(b)
In the event any Indemnitee should have an indemnity claim against any
Indemnitor hereunder which does not involve a third party Claim, the Indemnitee shall transmit
to the Indemnitor a Claims Notice. The Indemnitor shall have fifteen (15) business days after
receipt of any such Claims Notice in which to object in writing to the claim or claims made by
Indemnitee in such Claims Notice, which written objection (the “Objection Notice”) shall state,
in reasonable detail, the basis for Indemnitor’s objection. In the event that Indemnitor does
deliver an Objection Notice with respect to any claim or claims made in any Claims Notice, the
Indemnitor and the Indemnitee shall, within the fifteen (15) day period beginning as of the date
of the receipt by Indemnitee of the Objection Notice, attempt in good faith to agree upon the
proper resolutions of each of such claims. If the parties should so agree, a written memorandum
setting forth such agreement shall be prepared and signed by both parties. If no agreement can
be reached after good faith negotiations within such 15-day negotiating period (or such extended
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period as the Indemnitor and the Indemnitee shall mutually agree upon in writing), the parties
may pursue their remedies at law (subject to the terms and conditions of this Agreement).
6.4
Indemnification Limits and Restrictions.
(a)
De Minimis. No indemnification shall be payable by Seller or Shareholder
with respect to any indemnity claim under clause (i) of Section 6.1 to with respect to any
individual Loss (or series of related Losses arising out of the same or substantially similar
circumstances) which is (or, for such a series, are in the aggregate) less than Five Thousand
Dollars ($5,000.00) (the “De Minimis Amount”); provided, however, that, in each case subject
to the other terms of this Section 6, if such Loss (or Losses) exceeds the De Minimis Amount,
then all of such indemnification shall be payable for the entire amount of such Loss (or Losses),
including the portion that is less than the De Minimis Amount.
(b)
Deductible. No indemnification shall be payable by Seller or Shareholder
with respect to any indemnity claim under clause (i) of Section 6.1 until the total of all such valid
claims for indemnification, subject to the limitations contained in Section 6.4(c), shall exceed
One Hundred Thousand Dollars ($100,000.00) (the “Deductible”) (such amount being a
deductible amount versus a threshold), in which event the applicable Indemnitees shall then be
entitled to recover the amount of such recoverable claims in excess of the Deductible to the
extent that such Loss is not otherwise limited by this Section 6.4.
(c)
Caps.
The aggregate liability of Seller and Shareholder for
indemnification payable hereunder with respect to any Indemnity Claim under Section 6.1 shall
not exceed the Purchase Price (the “Cap”). Any indemnification shall be paid in United States
dollars in immediately available funds.(d) Notwithstanding anything in this Agreement to the
contrary, Losses shall not include (i) consequential, special or punitive damages or (ii) fees and
expenses of more than one counsel with respect to any indemnified claim or claims arising out of
the same general allegations or circumstances unless counsel to the Indemnitee has provided a
written opinion to the Indemnitor stating that legal conflict of interest requires that the
Indemnitor have separate counsel.
(e)
The limitations set forth in this Section 6.4 shall not apply to any claims of
intentional misrepresentation or fraud.
6.5
Seller and Shareholder Indemnification. With respect to any indemnity claim
under Section 6.1, Purchaser hereby agrees that it shall seek recourse and remedy for such
indemnifiable Losses (subject to Sections 6.4 and 6.7 below) in the following order of priority:
(a)
first, Purchaser shall enforce its set-off rights pursuant to Section 2.2(c),
including against any earn-out payments which are due or may become due under clause (4) of
Section 2.2(a), to the extent of such indemnifiable Losses;
(b)
to the extent that such indemnifiable Losses shall not be fully paid
pursuant to the foregoing clause (a), Purchaser shall seek recourse and remedy against Seller;
and
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(c)
to the extent that such indemnifiable Losses shall not be fully paid
pursuant to the foregoing clauses (a) and (b), Purchaser shall seek recourse and remedy against
Shareholder.
6.6
Exclusive Remedy.Notwithstanding anything contained herein to the contrary,
absent fraud, the rights and obligations of the parties under this Section 6, and set-off rights of
Section 2.2(c), , are the exclusive rights and obligations of the parties with respect to any breach
of any representation, warranty, covenant or agreement in this Agreement and shall be in lieu of
any other rights or remedies to which the party entitled to indemnification hereunder would
otherwise be entitled as a result of such breach. 6.7 Amount of Losses. The amount of any Loss
payable hereunder shall be calculated net of any insurance proceeds actually received by the
Indemnitee with respect thereto. In the event that an Indemnitee receives any insurance proceeds
with respect to any Loss for which any such Person has been indemnified hereunder, then a
refund equal to such insurance proceeds shall be made promptly to the Indemnitor. The
Indemnitee shall use commercially reasonable efforts to file insurance claims that may reduce or
eliminate Losses.
6.8
Subrogation. After any indemnification payment is made to Purchaser pursuant
to this Section 6, Seller and Shareholders shall, to the extent of such payment and to the extent
permitted by applicable law and applicable contracts, be subrogated to all rights (if any) of the
Purchaser against any third party in connection with the Losses to which such payment relates.
Without limiting the generality of the preceding sentence, Purchaser shall execute, upon the
written request of the Indemnitor, any instrument reasonably necessary to evidence such
subrogation rights.6.9 Adjustments to Purchase Price. All payments under this Section 6 shall be
treated as adjustments to the Purchase Price, unless otherwise required by applicable law, and the
parties to this Agreement agree to file all Tax Returns, or to cause all Tax Returns to be filed, in
a manner consistent with this Section 6.9.6.10
Survival. All representations and warranties
of Seller, Shareholder and Purchaser under this Agreement will survive the Closing until, and
will expire at the later of (i) 5:00 p.m., Eastern time, on later of (i) the first (1st) anniversary of
completion of the first audit of Purchaser after the Closing, or (ii) that date which is fourteen (14)
months from the Closing Date (the “Survival Date”). All covenants requiring performance prior
to Closing shall expire on the Closing Date and all covenants requiring performance by any party
after the Closing shall survive the Closing in accordance with their terms and claims for breach
therefor may be made at any time until the expiration of the statute of limitations applicable to
such claims. If a Claim Notice is delivered before the expiration of the applicable survival
period, the matters that are the subject of such Claim Notice shall survive until such indemnity
claim is finally resolved. Any Claim Notice resulting from any alleged breach or inaccuracy of
any representation or warranty herein must be asserted in writing which contains specific facts,
allegations and amounts sought by an Indemnitee to the Indemnitor prior to the Survival Date.
7.
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER AND THE
SHAREHOLDER.
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The obligations of the Seller and the Shareholder under this Agreement are
subject only to the delivery by Purchaser of the Agreed Liabilities Amount, delivery by
Purchaser to Seller of the Purchase Payment Amount as described in Section 2.2(a)(1) hereof and
the delivery of the documents described in Section 2.3(b) hereof and the satisfaction of each of
the following conditions:
7.1
Accuracy of Representations and Warranties. Each of the representations and
warranties of the Purchaser and iGambit contained herein and in any other agreements or
instruments provided for herein shall have been true and correct in all material respects on the
date hereof. Purchaser shall deliver to Seller and the Shareholder a certificate to such effect at
the Closing as to the representations and warranties of the Purchaser.
7.2
No Action or Proceeding. No claim, action, suit, investigation or other court
proceeding shall be pending or threatened before any court or governmental agency which
presents a risk of the restraint or prohibition of the transactions contemplated by this Agreement
or the obtaining of material damages or other relief in connection therewith.
7.3
Consents and Actions; Contracts. All requisite regulatory and/or other consents
and approvals of third parties, including but not limited to those set forth on Schedule 3.2 or
Schedule 3.22(e), shall have been obtained and completed.
7.4
Other Evidence. The Purchaser and iGambit shall have furnished to Seller such
further certificates and documents evidencing their due action in accordance with this Agreement
as Seller shall reasonably request.
8.
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.
The obligations of Purchaser to proceed to Closing under this Agreement are
subject to the fulfillment (or, at the option of Purchaser, the waiver) at or prior to the Closing
Date of each of the following conditions:
8.1
Accuracy of Representations and Warranties. Each of the representations and
warranties of the Seller and the Shareholder contained herein and in any other agreements or
instruments provided for herein shall have been true and correct in all material respects on the
date hereof. Each of Seller and the Shareholder shall deliver to Purchaser a certificate to such
effect at the Closing as to the representations and warranties of the Seller and the Shareholder.
8.2
Intentionally Omitted.
8.3
No Action or Proceeding. No claim, action, suit, investigation or other court
proceeding shall be pending or threatened before any court or governmental agency which
presents a risk of the restraint or prohibition of the transactions contemplated by this Agreement
or the obtaining of material damages or other relief in connection therewith.
8.4
Consents and Actions; Contracts. All requisite regulatory and/or other consents
and approvals of third parties, including but not limited to those set forth on Schedule 3.2 or
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Schedule 3.22(e), shall have been obtained and completed. The Seller and the Shareholder shall
have provided Purchaser with evidence satisfactory to Purchaser in its reasonable discretion that
(i) there are no applicable rights of first refusal, rights of first negotiation, rights of first offer or
similar rights of any kind that would require Seller, IGXUK, or the Shareholder to provide any
third party with notice, an opportunity to discuss, consent, negotiate or to engage in any of the
transactions contemplated hereby prior to consummation by Seller and the Shareholder hereof;
or (ii) that any and all such rights have been waived by the party possessing such rights.
8.5
Intentionally Omitted.
8.6
Intentionally Omitted.
8.7
Intentionally Omitted.
8.8
Agreed Liabilities Amount. Schedule 2.2(b) shall reflect a total amount needed to
satisfy all of the Creditors in full of $2,500,000 or less, together with evidence satisfactory to
Purchaser in its reasonable discretion that payment of the Agreed Liabilities Amount to each of
the Creditors in the amount set forth on such Schedule 2.2(b) with respect to each Creditor shall
be sufficient in all respects to satisfy fully and discharge all Liabilities of Seller and IGXUK, as
applicable, and in all events to enable Seller and IGXUK to transfer title to the Assets to the
Purchaser at the Closing free and clear of any and all Liens (other than Permitted Liens).
8.9
Intentionally Omitted.
8.10 [Reserved]
8.11 [Reserved]
8.12 Delivery of Ancillary Agreements. The Seller and the Shareholder shall have
furnished to Purchaser documents described in Section 2.3(c) hereof.
8.13 Intentionally Omitted.
8.14 Other Evidence. The Seller and the Shareholder shall have furnished to Purchaser
such further certificates and documents evidencing their due action in accordance with this
Agreement as Purchaser shall reasonably request.
9.
INTENTIONALLY OMITTED.
10.
MISCELLANEOUS.
10.1 Expenses. Each party to this Agreement shall pay all of its own closing costs and
other expenses relating hereto, including fees and disbursements of its counsel and accountants,
whether or not the transactions contemplated hereby are consummated.
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10.2 Taxes. The Shareholder and the Seller shall bear any and all Taxes of any nature
or type whatsoever, including, but not limited to stamp duty and other United Kingdom taxes,
that may become due and payable as a result of the consummation of the transactions
contemplated hereby, and the Shareholder and the Seller shall jointly and severally indemnify
and hold Purchaser harmless with respect thereto pursuant to Section 6.
10.3 Notices. All notices and other communications hereunder or in connection
herewith shall be in writing and delivered as follows:
If to the Seller or the Shareholder, to:
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to Purchaser, to:
▇▇▇▇▇ ▇▇▇▇▇▇, Esquire
iGambit Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Las Olas Centre II, Suite 1150
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Except as otherwise specifically provided herein, all notices, requests,
instructions and demands which may be given by any party hereto to any other party in the
course of the transactions herein contemplated shall be in writing and shall be served by express
mail through the U.S. Postal Service or similar expedited overnight commercial carrier. Service
of such notices, demands and requests shall be presumed to have occurred on the date that is one
(1) day after the date upon which the item was delivered to the U.S. Postal Service or similar
expedited overnight commercial carrier, provided the item was properly addressed, all postage
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and shipping charges were prepaid by the sender and the commercial carrier issued a dated
receipt to the sender acknowledging the commercial carrier’s receipt of the item. All such
notices, demands and requests shall be addressed as set forth above. Any party may change the
address at which it is to receive notice by like written notice to all other parties hereunder.
10.4 Entire Agreement. This Agreement (including the exhibits hereto and the lists,
schedules and documents delivered pursuant hereto, which are a part hereof) is intended by the
parties to and does constitute the entire agreement of the parties with respect to the transactions
contemplated by this Agreement. This Agreement supersedes any and all prior understandings,
written or oral, between the parties, and this Agreement may be amended, modified, waived,
discharged or terminated only by an instrument in writing signed by the party against which
enforcement of the amendment, modification, waiver, discharge or termination is sought.
10.5 Severability. If any provision of this Agreement shall be declared by any court of
competent jurisdiction illegal, void or unenforceable, the other provisions shall not be effected,
but shall remain in full force and effect.
10.6 Modification and Amendment. This Agreement may not be modified or amended
except by an instrument in writing duly executed by the parties hereto, and no waiver of
compliance of any provision or condition hereof and no consent provided for herein shall be
effective unless evidenced by an instrument in writing duly executed by the party hereto seeking
to be charged with such waiver or consent.
10.7 Time of the Essence. Time is of the essence in every provision of this Agreement
where time is a factor.
10.8 Governing Law; Jurisdiction; Exclusive Venue.
(a)
Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York exclusive of the choice of law rules thereof.
(b)
Exclusive Venue. The parties hereto agree that exclusive venue for any
litigation, action or proceeding arising from or relating to this Agreement shall lie in the County
Court in and for Suffolk County, New York, or, if federal diversity jurisdiction then exists, in the
United States District Court for the District of New York and each of the parties hereto expressly
waives any right to contest such venue for any reason whatsoever.
(c)
Waiver of Trial By Jury. EACH OF THE PARTIES HERETO
EXPRESSLY WAIVES THE RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION, ACTION OR PROCEEDING RELATING TO OR ARISING OUT OF THIS
AGREEMENT.
10.9 Intentionally Omitted.
10.10 Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, legatees, beneficiaries, personal
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representatives and other legal representatives and assigns, as the case may be. This Agreement
may not be assigned by any party hereto without the prior written consent of each other party
hereto; provided, however, that each party may assign its rights and obligations hereunder to any
affiliate of such party.
10.11 Enumerations and Headings. The enumerations and headings contained in this
Agreement are for convenience of reference only and shall in no way be held or deemed to
define, limit, describe, explain, modify, amplify or add to the interpretation, construction or
meaning of any provision or the scope or intent of this Agreement, or in any way effect this
Agreement.
10.12 Counterparts. This Agreement may be signed in two or more counterparts, all of
which taken together shall be deemed to constitute one original Agreement. This Agreement
may be executed by delivery of a facsimile or .pdf copy of an executed signature page with the
same force and effect as the delivery of an originally executed signature page. In the event any
party delivers a facsimile or .pdf copy of a signature page to this Agreement, such party shall
deliver an originally executed signature page at any time thereafter upon request; provided,
however, that the failure to deliver any such originally executed signature page shall not affect
the validity of the signature page delivered by facsimile or .pdf, which has and shall continue to
have the same force and effect as the originally executed signature page.
10.13 Intentionally Omitted.
10.14 Disclosure. The parties hereto will consult with each other and reach mutual
agreement before issuing any press release or otherwise making any statement or disclosure, oral
or written, with respect to this Agreement or the transactions contemplated hereby; provided,
however, that each party will be permitted to make, without the agreement of the other, such
disclosures to the public or to governmental entities as that party’s counsel reasonably deems
necessary to maintain compliance with applicable laws. Except as provided above, the existence
and/or contents of this Agreement shall not be disclosed by the Shareholder or the Seller without
the Purchaser’s prior written consent.
10.15 Confidentiality. Except as required by law or to carry out the transactions
contemplated by this Agreement (the “Transactions”), neither the Seller, the Shareholder nor the
Purchaser, nor the employees, attorneys, accountants and other agents and representatives of any
of the foregoing (collectively, “Representatives”) will disclose or use any Confidential
Information (as defined below), whether already furnished or to be furnished in the future to any
party hereto or their Representatives in any manner other than in connection with the evaluation
and negotiation of the transactions proposed in this Agreement once executed and delivered;
except to the extent that disclosure is required by law. For purposes of this Agreement,
“Confidential Information” means the existence and terms of this Agreement and any
information regarding Purchaser, the Seller or the Shareholder, their affiliates or the
Transactions. Confidential Information does not include information that a party to this
Agreement can demonstrate (i) is generally available to or known by the public other than as a
result of improper disclosure; (ii) is obtained by the disclosing party from a source other than the
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other party or its Representatives; or (iii) was in the possession of the other party prior to the
date hereof other than as a result of improper disclosure and was obtained other than in
connection with consideration of the transactions set forth in this Agreement, provided that such
source was not bound by a duty of confidentiality with respect to such information. Upon the
written request of any party, the other party will promptly return any Confidential Information in
its possession or in the possession of its Representatives.
10.16 Intentionally Omitted.
10.17 Rules of Usage. In this Agreement, unless a clear intention appears otherwise:
(a) the singular number includes the plural number and vice versa; (b) reference to any Person
includes such Person’s successors and assigns but, if applicable, only if such successors and
assigns are not prohibited by this Agreement, and reference to a Person in a particular capacity
excludes such Person in any other capacity or individually; (c) reference to any gender includes
each other gender; (d) reference to any agreement, document or instrument means such
agreement, document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof; (e) reference to any law means such law as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder; (f) ”hereunder,” “hereof,” “hereto,” and
words of similar import shall be deemed references to this Agreement as a whole and not to any
particular section or other provision hereof; (g) ”including” (and with correlative meaning
“include”) means including without limiting the generality of any description preceding such
term; (h) ”or” is used in the inclusive sense of “and/or”; (i) with respect to the determination of
any period of time, “from” means “from and including” and “to” means “to but excluding”;
(j) references to documents, instruments or agreements shall be deemed to refer as well to all
addenda, schedules or amendments thereto; and (k) section references shall be deemed to refer to
all subsections thereof, unless otherwise expressly indicated.
[Intentionally Left Blank –Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement under seal on the date first above written.
WITNESS:
PURCHASER:
IGXGLOBAL CORP.
a Delaware corporation
By:__________________________(SEAL)
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman
iGAMBIT:
iGambit Inc.
a Delaware corporation
By:___________________________(SEAL)
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
`
Title: CEO and President
SELLER:
IGX GLOBAL INC.
a New Jersey corporation
By:___________________________(SEAL)
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
SHAREHOLDER:
______________________________(SEAL)
▇▇▇▇▇▇ ▇▇▇▇▇
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