Exhibit 2.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into this 9th day of
February, 2001, by and between Medinex Systems, Inc., a Delaware corporation
("Medinex") and four of its subsidiaries (each a "Subsidiary" and collectively
the "Subsidiaries"), namely Net.Capitol, Inc., Raintree Communications
Corporation, Public Disclosure, Inc. and U.S. Congress Handbook, Inc., (Medinex
and the Subsidiaries are collectively referred to as the "Seller") and Votenet
Solutions, Inc., a Delaware corporation ("Purchaser").
R E C I T A L S :
A. Medinex develops and operates a division of its business,
generally referred to as Votenet, which is comprised of the four Subsidiaries,
all of which are located in Washington, D.C. Votenet provides content, products
and services for candidates for political office, voters, political
organizations, political action committees, trade associations, media
organizations and lobbyists (the "Business").
B. Purchaser desires to acquire specific assets of the Seller, as
hereinafter identified, and Seller desires to sell such assets to Purchaser, in
accordance with the terms and conditions of this Agreement.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
A G R E E M E N T :
SECTION 1 - DESCRIPTION OF TRANSACTION
1.1 Assets Purchased. Seller shall sell to Purchaser and
Purchaser shall purchase from Seller, on the terms and conditions set forth in
this Agreement, the assets set forth on Exhibit A, which represent all the
material assets used in the Business (except for the excluded assets listed on
Schedule 1.1) (the "Assets"). Medinex is also providing to Rich Acquisitions,
LLC, a Michigan limited liability company, and a shareholder of Purchaser,
certain stock purchase rights as more particularly described in Exhibit A-1
attached hereto.
1.2 Liabilities Assumed. Seller shall remain liable for all
liabilities and expenses of the Business incurred prior to December 31, 2000,
except for those liabilities and ongoing expenses expressly assumed by Purchaser
hereunder. Purchaser shall assume no liabilities except the payment of all
expenses of the Business incurred after December 31, 2000, and the performance
of all of Seller's future and on going obligations under the contracts listed on
Exhibit B (the "Assumed Liabilities"). Purchaser agrees to indemnify and hold
Seller harmless, in accordance with Section 8.2, from and against any and all
claims arising out of or related to the Assumed Liabilities.
1.3 Purchase Price for Assets. The purchase price for the Assets
shall be One Million One Hundred Fifty Thousand ($1,150,000) dollars (the
"Purchase Price").
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1.4 Payment of Purchase Price. The Purchase Price shall be
wired transfer to Seller at the time of Closing, less the reserve held in escrow
pursuant to Section 1.8 below.
1.5 Tax Allocation. Purchaser and Seller shall negotiate in good
faith prior to the Closing Date and determine the allocation of the
consideration paid by Purchaser for the Assets. Each party hereto agrees (i)
that any such allocation shall be consistent with Section 1.3 above and the
requirements of Section 1060 of the Internal Revenue Code of 1986, as amended
and the regulations thereunder, (ii) to complete jointly and to file separately
Form 8594 with its federal income tax return consistent with such allocation for
the tax year in which the Closing Date occurs and (iii) that no party will take
a position on any income, transfer or gains tax return, before any governmental
authority charged with the collection of any such tax or in any judicial
proceeding, that is in any manner inconsistent with the terms of any such
allocation without the consent of other party.
1.6 Closing. This Agreement shall be closed at the offices of
Seller in Post Falls, Idaho on or before February 9, 2001, or at such other
place and time as the parties may agree in writing (the "Closing" or the
"Closing Date"). If Closing has not occurred on or prior to February 16, 2001,
then any party may elect to terminate this Agreement. If, however, the Closing
has not occurred because of a breach of contract by one or more parties, the
breaching party or parties shall remain liable for breach of contract.
1.7 Adjustments. Expenses, including but not limited to
utilities, taxes and rents shall be prorated between Seller and Purchaser as of
the close of business on December 31, 2000.
1.8 Public Disclosure, Inc. Escrow. Schedule 1.8 contains a list
of the assets of the Business associated with operation of Public Disclosure,
Inc., otherwise known as FECInfo (the "Public Disclosure Assets"). The Public
Disclosure Assets shall be held back from the transfer of the Assets hereunder
pending the expiration or sooner termination of the 15-day right of first
refusal period to which the Selling Shareholders of Public Disclosure, Inc. (the
"Selling Shareholders") are entitled pursuant to Section 5.8(b) of the Agreement
and Plan of Merger entered into on October 22, 1999, by and between Seller,
Public Disclosure, Inc. and the Selling Shareholders (the "Public Disclosure
Merger Agreement"). At Closing, the sum of Two Hundred Thirty Thousand Dollars
($230,000.00) (the "Escrow Reserve") and an executed ▇▇▇▇ of sale of the Public
Disclosure Assets shall be placed in an interest-bearing escrow account and held
in accordance with the terms and conditions of the Escrow Agreement, in the form
attached hereto as Exhibit A-2, to be executed by the parties and the escrow
holder at Closing.
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in Schedule 2 (Seller's Schedule of Exceptions),
Seller represents, warrants and agrees, knowing and intending that Purchaser
shall rely thereon in entering into this Agreement, that the following
representations and warranties are true and correct on the date hereof:
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2.1 Organization, Good Standing and Qualification. Medinex and
each Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the state listed on Schedule 2.1. Medinex and each
Subsidiary has all requisite corporate power and authority to own and operate
its properties and assets, to execute and deliver this Agreement, to carry out
the provisions of this Agreement and to carry on its business as presently
conducted and as presently proposed to be conducted. Medinex and each Subsidiary
is duly qualified and authorized to do business and is in good standing as a
foreign corporation in all jurisdictions listed on Schedule 2.1. Such
jurisdictions comprise all those in which the nature of its activities and of
its properties (both owned and leased) make such qualifications necessary,
except for those jurisdictions in which failure to do so would not have a
material adverse effect on Medinex or any Subsidiary or any of their respective
businesses. Medinex and each Subsidiary has made available to Purchaser true,
correct and complete copies of their respective articles of incorporation and
bylaws, each as amended to date.
2.2 Authorization; Binding Obligations. Seller has all requisite
right, power and authority to enter into and to perform its obligations under
this Agreement. This Agreement constitutes the legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
2.3 Title to Properties and Assets; Liens, Etc. Exhibit A is a
complete and accurate list of all material Assets (whether leased or owned) of
the Business, including intellectual property. The Assets are sufficient to
operate the Business as presently conducted, it being understood that no cash is
being acquired and that cash is necessary to operate the Business. However, the
Assets do not necessarily represent all of the assets historically used by
Seller in the operation of the Business, it being understood that Purchaser will
conduct its own inventory and evaluation of the Assets prior to Closing to
satisfy itself as to the adequacy and condition of the Assets. Except as set
forth on Schedule 2.3, Seller has good and marketable title to all of its
properties and Assets listed on Exhibit A, free and clear of any material
mortgage, pledge, lien, lease, encumbrance or charge, other than those resulting
from taxes which have not yet become due and payable. All facilities,
machinery, equipment, fixtures, vehicles and other properties listed on Exhibit
A are in good operating condition and repair and are reasonably fit and usable
for the purposes for which they are being used. Seller makes no representation
or warranty as to the collectibility of the accounts receivable listed on
Exhibit A.
2.4 Patents and Trademarks. Seller owns or possesses sufficient
legal rights to all trademarks, service marks, trade names, copyrights, trade
secrets, licenses, patents, information and other proprietary rights and
processes listed on Exhibit A to operate the Business, without any infringement
of the rights of others. There are no outstanding options, licenses or
agreements of any kind relating to the foregoing. Seller has not received any
communications alleging that, in regards to the foregoing, it has violated any
of the patents, trademarks, service marks, trade names, copyrights or trade
secrets or other proprietary rights of any other person or entity.
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2.5 Litigation. Except as set forth on Schedule 2.5, there is no
action, suit, proceeding or investigation pending, or to Seller's knowledge
threatened, against Seller that questions the validity of this Agreement or the
right of Seller to enter into any such agreement, or to consummate the
transactions contemplated hereby or thereby, or the Seller's rights with regard
to the Assets.
2.6 Taxes. Each tax, copyright fee, or other charges or fees
required to have been paid, or claimed by any governmental body to be payable,
by Seller with respect to the Assets listed on Exhibit A (whether pursuant to
any tax return or otherwise) has been duly paid in full and on a timely basis,
and all such taxes, fees and charges which are due for the period prior to the
Closing Date have been paid in full.
2.7 Compliance with other Instruments. Neither the execution nor
delivery of this Agreement, nor the consummation or performance of any of the
transactions contemplated thereby, will directly or indirectly, (with or without
notice or lapse of time):
(i) result in a violation of (A) any of the provisions of
Seller's certificate of incorporation or bylaws, or (B) any resolution adopted
by Seller's stockholders or Seller's board of directors;
(ii) result in a violation of, or give any governmental
body or other person the right to exercise any remedy or obtain any relief
under, any legal requirement or any order to which Seller, or any of the Assets
owned or used by Seller, is subject;
(iii) result in a breach of, or result in a default under,
any provision of any contract to which Seller is a party; or
(iv) give any person the right to (A) declare a default or
exercise any remedy under any contract to which Seller is a party, (B)
accelerate the maturity or performance of any contract to which Seller is a
party or (C) cancel, terminate or modify any contract to which Seller is a
party.
2.8 Approvals. This Agreement and the consummation of the
transactions contemplated by this Agreement have been approved by all necessary
corporate action on the part of Seller (including without limitation, final
approval from Seller's board of directors).
2.9 Full Disclosure. Seller has made available to Purchaser an
accurate and complete copy of its Registration Statement on Form SB-2 No. 333-
74569 filed with the Securities and Exchange Commission (the "SEC") on June 22,
1999 (the "Registration Statement"), its 10KSB for the period ending December
31, 1999 (the "10K"), and its 10QSB's for the period ending March 31, 2000, June
30, 2000 and September 30, 2000 (the "10QSB's"). The Registration Statement, the
10K, and the 10QSB's (i) comply in all material respects with the applicable
requirements of the Securities Act of 1933 and the Securities Exchange Act of
1934 and (ii) do not contain any untrue statements of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Further, no representation or warranty made by Seller
in this Agreement, nor any statement or certificate furnished or to be furnished
by the Seller to the Purchaser pursuant hereto, or in connection with
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the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact or omits or will omit a material fact necessary to
make the statements contained therein not misleading.
2.10 Contingent Liabilities. There are no material undisclosed or
contingent liabilities with respect to the Business or the Assets.
2.11 Employment. On the Closing Date, Seller shall have paid all
wages and salaries (excluding accrued vacation pay and sick pay) of all
employees of the Seller due for the period prior to January 1, 2001.
2.12 Insurance. Schedule 2.12 is a true and complete list of all
insurance policies maintained by the Seller and related to the Business.
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth in Schedule 3 (Purchaser's Schedule of
Exceptions), Purchaser represents, warrants and agrees, knowing and intending
that Seller shall rely thereon in entering into this Agreement, that the
following representations and warranties are true and correct on the date
hereof:
3.1 Organization, Good Standing and Qualification. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware. Purchaser has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, to carry out the provisions of this Agreement and to carry on
its business as presently conducted and as presently proposed to be conducted.
Purchaser is duly qualified and authorized to do business and is in good
standing as a foreign corporation in all jurisdictions in which the nature of
its activities and of its properties (both owned and leased) make such
qualifications necessary, except for those jurisdictions in which failure to do
so would not have a material adverse effect on Purchaser or its respective
businesses. Purchaser has made available to Seller true, correct and complete
copies of Purchaser's articles of incorporation and bylaws, each as amended to
date.
3.2 Authorization; Binding Obligations. Purchaser has all requisite
right, power and authority to enter into and to perform its obligations under
this Agreement. This Agreement constitutes the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, subject to (i) laws of general application relating to bankruptcy,
insolvency and the relief of debtors and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies.
3.3 Litigation. There is no action, suit, proceeding or
investigation pending, or to the knowledge of Purchaser, currently threatened
against Purchaser that questions the validity of this Agreement or the right of
Purchaser to enter into any such agreement, or to consummate the transactions
contemplated hereby or thereby.
3.4 Compliance with other Instruments. Neither the execution nor
delivery of this Agreement, nor the consummation or performance of any of the
transactions
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contemplated thereby, will materially, directly or indirectly, (with or without
notice or lapse of time):
(i) result in a violation of (A) any of the provisions of
Purchaser's certificate of incorporation or bylaws, or (B) any resolution
adopted by Purchaser's stockholders or Purchaser's board of directors;
(ii) result in a violation of, or give any governmental body or
other person the right to exercise any remedy or obtain any relief under, any
legal requirement or any order to which Purchaser, or any of the assets owned or
used by Purchaser, is subject;
(iii) result in a breach of, or result in a default under, any
provision of any contract to which Purchaser is a party; or
(iv) give any Person the right to (A) declare a default or
exercise any remedy under any contract to which Purchaser is a party, (B)
accelerate the maturity or performance of any contract to which Purchaser is a
party or (C) cancel, terminate or modify any contract to which Purchaser is a
party.
3.5 Approvals. This Agreement and the consummation of the
transactions contemplated by this Agreement have been approved by all necessary
corporate action on the part of Purchaser.
3.6 No Untrue Statement. None of the foregoing representations or
warranties contain any untrue statements of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Further, no representation or warranty made by Purchaser
in this Agreement, nor any statement or certificate furnished or to be furnished
by the Purchaser to the Seller pursuant hereto, or in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact or omits or will omit a material fact necessary to make the
statements contained therein not misleading.
3.7 Transferred Assets. Purchaser has conducted an inventory and
inspection of the Assets transferred by Seller hereunder and represents that it
is satisfied with the adequacy and condition of the Assets for the conduct of
the Business.
SECTION 4 - COVENANTS
4.1 Seller's Operation of Business Prior to Closing. Seller agrees
that between the date of this Agreement and the Closing Date, Seller will
continue to operate its business of developing and operating the Business (as
related to the Assets) in the usual and ordinary course and in substantial
conformity with all applicable laws, ordinances, regulations, rules, or orders,
and will use its best efforts to preserve the Assets being transferred pursuant
to this Agreement.
4.2 Access and Investigation. Seller and Purchaser shall ensure that,
at all times during the Pre-Closing period:
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(a) Each party and its representatives provide the other party
and its representatives with access, during normal business hours upon
reasonable notice, to its representatives, personnel and assets and to all
existing books, records, tax returns, work papers and other documents and
information relating to such party;
(b) Each party and its representatives provide the other party
and its representatives with such copies of existing books, records, tax
returns, work papers and other documents and information relating to such party
as may be requested in good faith; and
4.3 Conditions and Best Efforts. Purchaser and Seller will use their
best efforts to effectuate the transactions contemplated by this Agreement and
to fulfill all the conditions of Purchaser's and Seller's obligations under this
Agreement, and shall do all acts and things as may be required to carry out
Purchaser's and Seller's obligations and to consummate this Agreement.
Specifically, the parties shall work together in good faith prior to and after
the Closing (i) to obtain third party consents to the assignment of the
contracts and agreements listed on Exhibit B, and (ii) to assign the
intellectual property listed on Exhibit A to Purchaser.
4.4 Public Announcements. Neither Purchaser nor Seller (or any of
their respective representatives) shall issue any press release or make any
public statement regarding this Agreement or the transactions contemplated
thereby, without the other party's prior written consent. Each party will use
reasonable efforts to consult with the other party prior to issuing any press
release or making any public statement regarding this transaction; provided that
any party shall be free to make any disclosure regarding this Agreement that it
deems reasonably necessary in order to comply with applicable securities laws or
the rules of the Nasdaq Stock Market.
4.5 Confidential Information. If for any reason the sale of Assets
is not closed, no party will disclose to third parties any confidential
information received from the other party in the course of investigating,
negotiating, and performing the transactions contemplated by this Agreement.
4.6 Noncompetition Obligations. For a period of thirty six (36)
months from the date of this Agreement, Seller will not, directly or indirectly,
at any place in the world, (i) engage or become interested (as owner,
stockholder, partner, member, creditor, consultant, employee or otherwise) in
any business in competition with the Business, (ii) solicit, divert, take away,
or attempt to solicit, divert or take away, any of Purchaser's customers or the
business or patronage of any such customers, either for itself or on behalf of
any other person, partnership, corporation or other entity, or (iii) solicit,
recruit or hire any employee of Purchaser, either for itself or on behalf of any
other person, partnership, corporation or other entity. The parties acknowledge
that Purchaser will be conducting business throughout the world and that the
worldwide geographic scope of this covenant is reasonably necessary to protect
Purchaser's legitimate business interests. The parties further acknowledge that
money damages alone would not adequately compensate Purchaser in the event of a
breach of the foregoing restrictive covenant. Therefore, Seller does hereby
agree that in addition to all of the remedies available at law or in equity,
Purchaser shall be entitled to injunctive relief for the enforcement of the
obligation contained in this Section 4.6.
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SECTION 5 -CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser to effect the transaction contemplated by
this Agreement are subject to the satisfaction, at or prior to Closing, of each
of the following conditions (any of which may be waived by Purchaser, in whole
or in part):
5.1 Representations, Warranties, and Covenants of Seller. All
representations and warranties made in this Agreement by Seller shall be true as
of the Closing Date as fully as though such representations and warranties had
been made on and as of the Closing Date, and, as of the Closing Date, Seller
shall not have violated nor shall have failed to perform in accordance with any
covenant contained in this Agreement.
5.2 Condition of the Assets. There shall have been no material
adverse change in the condition of the Assets or the Business prior to the
Closing Date.
5.3 No Suits or Actions. At the Closing Date no suit, action, or
other proceeding shall have been threatened or instituted to restrain, enjoin,
or otherwise prevent the consummation of this Agreement or the contemplated
transactions.
5.4 Securities Law Compliance. All applicable requirements of the
Securities Act of 1933 and any applicable state securities laws shall have been
satisfied.
5.5 Approvals. This Agreement and the consummation of the
transactions contemplated by this Agreement shall have been approved by all
necessary corporate action on the part of Purchaser.
5.6 Agreements and Documents. Purchaser shall have received the
following agreements and documents, each of which shall be in full force and
effect:
(a) a ▇▇▇▇ of Sale and Assignment, substantially in the form of
Exhibit C;
(b) such other documents, to the extent such documents are
reasonably available or should be reasonably available, as Purchaser may
reasonably request in good faith for the purpose of (i) evidencing the accuracy
of any representation or warranty made by Seller, (ii) evidencing the compliance
by Seller with, or the performance by Seller of, any covenant or obligation set
forth in this Agreement, (iii) evidencing the compliance with any applicable
federal or state securities law, (iv) evidencing the satisfaction of any
condition set forth in this Section 5 or (v) otherwise facilitating the
consummation or performance of any of the transactions contemplated by this
Agreement.
SECTION 6 - CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller to effect the transaction contemplated by
this Agreement are subject to the satisfaction, at or prior to Closing, of each
of the following conditions (any of which may be waived by Seller, in whole or
in part):
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6.1 Representations, Warranties, and Covenants of Purchaser. All
representations and warranties made in this Agreement by Purchaser shall be true
as of the Closing Date as fully as though such representations and warranties
had been made on and as of the Closing Date, and, as of the Closing Date,
Purchaser shall not have violated nor shall have failed to perform in accordance
with any covenant contained in this Agreement.
6.2 No Suits or Actions. At the Closing Date no suit, action, or
other proceeding shall have been threatened or instituted to restrain, enjoin,
or otherwise prevent the consummation of this Agreement or the contemplated
transactions.
6.3 Securities Law Compliance. All applicable requirements of the
Securities Act of 1933 and any applicable state securities laws shall have been
satisfied.
6.4 Approvals. This Agreement and the consummation of the
transactions contemplated by this Agreement shall have been approved by all
necessary corporate action on the part of Seller.
6.5 Agreements and Documents. Seller shall have received the
following agreements and documents, each of which shall be in full force and
effect:
(a) such other documents, to the extent such documents are
reasonably available or should be reasonably available, as Seller may reasonably
request in good faith for the purpose of (i) evidencing the accuracy of any
representation or warranty made by Purchaser, (ii) evidencing the compliance by
Purchaser with, or the performance by Purchaser of, any covenant or obligation
set forth in this Agreement, (iii) evidencing the compliance with any applicable
federal or state securities law, (iv) evidencing the satisfaction of any
condition set forth in this Section 6 or (v) otherwise facilitating the
consummation or performance of any of the transactions contemplated by this
Agreement.
SECTION 7 - TERMINATION
7.1 Termination Events. This Agreement may be terminated prior
to the Closing:
(a) by Purchaser if (i) there is a material breach of any
covenant or obligation of Seller or (ii) Purchaser reasonably determines that
the timely satisfaction of any condition set forth in Section 5 has become
impossible (other than as a result of any failure on the part of Purchaser to
comply with or perform any covenant or obligation of Purchaser set forth in this
Agreement);
(b) by Seller if (i) there is a material breach of any covenant
or obligation of Purchaser or (ii) Seller reasonably determines that the timely
satisfaction of any condition set forth in Section 6 has become impossible
(other than as a result of any failure on the part of Seller to comply with or
perform any covenant or obligation of Seller set forth in this Agreement);
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(c) by Purchaser at or after the Closing Date if any condition
set forth in Section 5 has not been satisfied by the Closing Date;
(d) by Seller at or after the Closing Date if any condition set
forth in Section 6 has not been satisfied by the Closing Date;
(e) by Purchaser if the Closing has not taken place on or before
February 16, 2001 (other than as a result of any failure on the part of
Purchaser to comply with or perform any covenant or obligation of Purchaser set
forth in this Agreement);
(f) by Seller if the Closing has not taken place on or before
February 16, 2001 (other than as a result of the failure on the part of Seller
to comply with or perform any covenant or obligation of Seller set forth in this
Agreement);
(g) by the mutual consent of Purchaser and Seller.
7.2 Termination Procedures. If any party wishes to terminate this
Agreement pursuant to Section 7.1, such party shall deliver to the other party a
written notice stating that they are terminating this Agreement and setting
forth a brief description of the basis on which they are terminating this
Agreement.
7.3 Effect of Termination. If this Agreement is terminated pursuant
to Section 7.1, all further obligations of the parties under this Agreement
shall automatically terminate; provided, however, that: (a) neither Purchaser
nor Seller shall be relieved of any obligation or liability arising from any
prior breach by such party of any provision of this Agreement; and (b) the
parties shall, in all events, remain bound by and continue to be subject to the
provisions set forth in Section 4.5.
SECTION 8 - INDEMNIFICATION
8.1 Survival of Representations and Warranties. All representations
and warranties made in this Agreement shall survive the Closing of this
Agreement. Any party learning of a misrepresentation or breach of representation
or warranty under this Agreement shall promptly give written notice thereof to
all other parties to this Agreement. The representations and warranties in this
Agreement shall terminate two years from the Closing Date, and such
representations or warranties shall thereafter be without force or effect,
except (i) any claim with respect to which notice has been given to the party to
be charged prior to such expiration date, and (ii) fraud claims, which shall
survive for the statute of limitations applicable to claims based on such
matters.
8.2 Indemnification. Purchaser and Seller hereby agree to indemnify
and hold each other, their successors, and assigns harmless from and against:
(a) Any and all damage or deficiency (including reasonable
attorneys fees) resulting from any misrepresentation, breach of warranty or
covenant, or nonfulfillment of any agreement on the part of any party under this
Agreement, specifically including without
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limitation, Purchaser's obligation to assume and perform the Assumed Liabilities
and Seller's obligation to perform all liabilities relating to the Business
other than the Assumed Liabilities.
(b) The indemnity obligations under Section 8.2 shall be subject
to the following: if any claim is asserted against Purchaser or Seller that
would give rise to a claim by Purchaser or Seller against one of the other
parties to this Agreement for indemnification under the provisions of this
section, then Purchaser or Seller, as the case may be, shall promptly give
written notice to the other party concerning such claim and the party
responsible for indemnification under the provisions of this section shall, at
no expense to the other party to this Agreement, defend the claim actively and
diligently with counsel of its choice, reasonably satisfactory to the other
party. The indemnified party shall not take any action with respect to the
indemnified claim without the prior written consent of the indemnifying party.
If the indemnifying party fails to respond to the written notification of the
indemnified party within thirty (30) days of such notice, then the indemnified
party may take such action as is reasonably necessary to protect its interests.
SECTION 9 - MISCELLANEOUS PROVISIONS
9.1 Purchaser's Acceptance. Purchaser represents and acknowledges
that it has entered into this Agreement on the basis of its own examination,
personal knowledge, and opinion of the value of the Business. Purchaser has not
relied on any representations made by Seller other than those specified in this
Agreement. Purchaser further acknowledges that Seller has not made any
agreement or promise to repair or improve any of the equipment, or other
personal property being sold to Purchaser under this Agreement, and that
Purchaser takes all such property in the condition existing on the date of this
Agreement, except as otherwise provided in this Agreement.
9.2 Risk of Loss. The risk of loss, damage, or destruction to any of
the equipment, inventory, or other assets to be conveyed to Purchaser under this
Agreement shall be borne to the time of Closing by Seller.
9.3 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified, or supplemented only by a written agreement
signed by all of the parties hereto.
9.4 Notices. All notices, requests, demands, and other
communications required or permitted hereunder will be in writing and will be
deemed to have been duly given when delivered by hand or two days after being
mailed by certified or registered mail, return receipt requested, with postage
prepaid:
If to Seller, to: Medinex Systems, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with copy to: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Rock & Fields,
Chtd.
Asset Purchase Agreement 11
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other person or address as Seller furnishes to Purchaser pursuant to
the above.
If to Purchaser, to: Votenet Solutions, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with copies to: ▇▇▇▇▇▇ ▇▇▇▇
Rich Acquisitions LLC
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇. Dine
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such person or address as Purchaser furnishes to Seller pursuant to the
above.
9.5 Attorney Fees. In the event an arbitration, suit or action is
brought by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
9.6 Dispute Resolution. The parties shall attempt in good faith to
resolve any controversy or claim arising out of or relating to this Agreement,
or the breach, termination, or validity thereof (a "Dispute") promptly by
negotiation between the parties. If a Dispute has not been resolved within 30
days by negotiation, the parties shall attempt to mediate the Dispute through a
mediator or mediation service in Wilmington, Delaware, having no fewer than
three (3) years of operating experience in Wilmington, Delaware. If after good
faith by the parties to this Agreement a Dispute is not resolved by mediation,
then the Dispute shall be settled by arbitration by a sole arbitrator in
accordance with the Center for Public Resources Rules for Non-Administered
Arbitration of Business Disputes, and governed by the United States Arbitration
Act, 9 U.S.C. (S)(S) 1-16, except as otherwise provided herein. Judgment upon
the award rendered by the arbitrator may be entered by any court having
jurisdiction thereof. The place of arbitration shall be Wilmington, Delaware.
The arbitrator shall apply the law to the dispute in the same manner as a judge
would were the dispute before a court of law of the state of Idaho. The
arbitrator shall have the authority to award any remedy or relief that a court
of the state of Delaware could order or grant, including, without limitation,
specific performance of any obligation created under the Agreement, the issuance
of an injunction, or the imposition of sanctions for abuse or frustration of the
arbitration process. Notwithstanding the foregoing, the arbitrator shall not
have authority to award punitive damages. The parties shall take all
Asset Purchase Agreement 12
reasonable steps necessary to conduct a hearing no later than 45 days after
submission of the matter to arbitration. The arbitrator shall render his
decision within 15 days after the close of the arbitration hearing. The
arbitration award shall be in writing and shall specify the factual and legal
bases for the award.
9.7 Presumption. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party. All parties acknowledge that they have had
sufficient opportunity to obtain advice from their own counsel in regards to the
drafting and creation of this Agreement.
9.8 Governing Law, Time, Titles, Pronouns. This Agreement shall be
governed by and construed in accordance with the laws of the state of Delaware.
In computing any period of time pursuant to this Agreement, the day of the act,
event, or default from which the designated period of time begins to run shall
be included, unless it is a Saturday, Sunday, or a legal holiday, in which event
the period shall begin to run on the next day which is not a Saturday, Sunday,
or legal holiday. All section titles or captions contained in this Agreement
are for convenience only and shall not be deemed part of the context nor affect
the interpretation of this Agreement. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or persons may require. This Agreement, including
the Exhibits and Schedules attached hereto, contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement. Any
amendments to this Agreement must be in writing and signed by the party against
whom enforcement of that amendment is sought. This Agreement shall be binding
upon the heirs, executors, administrators, successors, and assigns of the
parties hereto.
9.9 Further Action, Counterparts, Savings Clause. The parties hereto
shall execute and deliver all documents, provide all information, and take or
forbear from all such action as may be necessary or appropriate to achieve the
purpose of the Agreement. This Agreement may be executed in several
counterparts and transmitted by facsimile and all so executed shall constitute
one Agreement, binding on all the parties hereto even though all the parties are
not signatories to the original or the same counterpart. Nothing herein shall
be construed to be to the benefit of any third party, nor is it intended that
any provision shall be for the benefit of any third party. If any provision of
this Agreement, or the application of such provision to any person or
circumstance, shall be held invalid, the remainder of this Agreement, or the
application of such provision to persons or circumstances other than those as to
which it is held invalid, shall not be affected thereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Asset Purchase Agreement 13
IN WITNESS WHEREOF, the undersigned have executed this Agreement the
date and year set forth above.
PURCHASER:
Votenet Solutions, Inc.
a Delaware corporation
By:________________________________
, President
SELLER:
Medinex Systems, Inc,
a Delaware corporation
By:________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and
Chief Executive Officer
SUBSIDIARIES:
Net Capitol, Inc.
By:________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and
Chief Executive Officer
Raintree Communications Corporation
By:________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and
Chief Executive Officer
Asset Purchase Agreement 14
Public Disclosure, Inc.
By:________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and
Chief Executive Officer
U.S. Congress Handbook, Inc.
By:________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and
Chief Executive Officer
Asset Purchase Agreement 15