Exhibit 10.2
PURCHASE AGREEMENT
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This Purchase Agreement (the "Agreement") is made and entered into on May
29, 2003, by and among Sharp Holding Corporation, a Delaware corporation (the
"Seller"), and Octopus Media, LLC, a Delaware Limited Liability Company (the
"Buyer"").
WHEREAS, the Seller owns and desires to sell: the HyperCD intellectual
property as set forth in Exhibit "A" hereto; certain tangible assets located in
New York City as set forth in Exhibit "B" hereto; the rights and obligations of
a lease for office space in New York City as set forth in Exhibit "C" hereto;
the URLs as set forth in Exhibit "D" hereto; the rights and obligations of an
employer and employment agreements with certain persons as set forth in Exhibit
"E" hereto; the rights and obligations of a contracting party in certain
contracts as set forth in Exhibit "F" hereto. All of the above are collectively
the "Purchased Assets"; and
WHEREAS, the Seller has certain liabilities related to its HyperCD
business, which include obligations for ongoing operating expenses, obligations
of the office lease in New York City and certain existing Employment Agreements
that shall be assumed by the Buyer, all of the above are collectively the
"Assumed Liabilities"; and
WHEREAS, the Buyer desires to purchase the Purchased Assets subject to the
Assumed Liabilities; and
WHEREAS, Buyer desires to acquire 1,000,000 shares of restricted common
stock of the Seller (the "Sharp Stock"), and a warrant to purchase up to
1,000,000 restricted shares of common stock of the Seller at an exercise price
of $0.10 per share expiring on May 31, 2008 (the "Sharp Warrants").
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements and the respective representations and warranties herein contained,
and on the terms and subject to the conditions herein set forth, the parties
hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE OF THE PURCHASED ASSETS;
ASSUMPTION OF LIABILITES; AND
ASSIGNMENT OF CONTRACTS
Section 1.1 Purchase of the Purchased Assets. Subject to the terms and
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conditions set forth in this Agreement, at the Closing (as hereinafter defined)
the Seller hereby agrees to sell, transfer, assign, convey and deliver to Buyer,
and the Buyer agrees to purchase, all of the Purchased Assets and any and all
Assumed Liabilities related thereto. The ▇▇▇▇ of Sale and the Assignment of
Intellectual Property are set forth in Exhibits 1.1(a) and 1.1(b) hereto.
Section 1.2 Purchase of Sharp Stock and Sharp Warrants. Subject to the
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terms and conditions set forth in this Agreement, at the Closing (as hereinafter
defined) the Seller hereby agrees to sell and deliver to Buyer, and the Buyer
agrees to purchase the Sharp Stock and the Sharp Warrants (collectively, the
"Investment in Sharp"). The Seller shall grant to the Buyer piggy-back
registration rights for the Sharp Stock and the stock underlying the Sharp
Warrants as set forth in Section 5.11 herein
Section 1.3 Assumption of the Assumed Liabilities. Subject to the terms
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and conditions set forth in this Agreement, at the Closing (as hereinafter
defined) the Buyer hereby agrees to assume all of the Assumed Liabilities as
defined herein and as set forth on Exhibit 1.3-1, effective as of April 15,
2003, and to reimburse Seller, at Closing, for such Assumed Liabilities incurred
from April 15, 2003 until the Closing Date. In addition, Buyer shall reimburse
Seller, at Closing, for any deposits or prepayments on the office lease in New
York City as set forth in Exhibit 1.3-2.
Section 1.4 Assignment of Contracts. Subject to the terms and
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conditions set forth in this Agreement, at the Closing (as hereinafter defined)
the Seller hereby agrees to transfer, assign, convey and deliver to Buyer, and
the Buyer agrees to assume, all of the contracts set forth in Exhibit "F" and
any and all liabilities related thereto (the "Contract Assignments").
Section 1.5 Transactions. The transactions described in this Section I
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are collectively the "Transactions".
Section 1.6 Intent of the Parties. Although the Exhibits to this
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Agreement are intended to be complete, in the event such Exhibits fail to
contain the description of any asset belonging to Seller which is used in
connection with HyperCD or are otherwise necessary for the ownership of the
HyperCD, such assets shall nonetheless be deemed transferred to Buyer at the
Closing. Buyer shall not assume any liabilities other than the Assumed
Liabilities.
ARTICLE II
BUYER'S CONSIDERATION
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As consideration for the Transactions, the Buyer shall pay $150,000 as
consideration for the Purchased Assets and $150,000 as consideration for the
Sharp Stock and the Sharp Warrants. The Buyer shall pay and deliver the
consideration to the Seller (the "Buyer's Consideration") as follows:
(i) $120,000 in cash, cashier's check, or wire transfer at the
Closing, or by the cancellation and voiding of indebtedness of
the Seller to ▇▇▇▇▇ ▇▇▇ (the Manager of the Buyer) as evidenced
by that certain promissory note dated April 2, 2003 between the
Seller and ▇▇▇▇▇ ▇▇▇ (the "Existing Note"), in a manner
satisfactory to the Seller; and
(ii) Six installments of $30,000 each, payable on the first of each
month beginning June 1, 2003 as evidenced by a promissory note
whose maker shall be the Buyer (the "New Note")in a form
satisfactory to the Seller. The New Note shall be secured (the
"Security Agreement") by the Purchased Assets and all source code
related thereto. The New Note and the Security Agreement shall be
in the form set forth in Exhibit 2.1(ii) hereto.
ARTICLE III
LICENSES
Section 3.1 License From Buyer to Seller for HyperCD. The Buyer hereby
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grants a License for HyperCD (the "HyperCD License") to the Seller as set forth
in Exhibit 3.1, to make and sell HyperCD products and services for five years
from the date hereon, with no royalty in year one, and a royalty of one and
one-half cents ($0.015) per each medium sold by the Seller pursuant to the
HyperCD License (e.g., a medium may be a compact disk or other device with a
similar function or a web application or similar application) in years two
through five. Under the HyperCD License, the Buyer shall also promptly provide
the Seller with copyable copies, updates, upgrades and new versions of HyperCD
and of any software that the Buyer creates to replace HyperCD, as the Buyer
creates such things. The Buyer shall provide to the Seller and its customers the
services associated with HyperCD at no additional cost to the Seller or its
customers.
Section 3.2 Exclusive Nature of HyperCD License. During the termof the
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HyperCD License, the HyperCD License shall be a non-exclusive license for any
market except that the HyperCD License shall be an exclusive license for use in
the "co-branded credit card" market and in the "e-Finance Internet ▇▇▇▇ Paying"
market (collectively the "Exclusive Markets"), with the further exception that
the Buyer, for itself, its affiliates and Com-Pac Services, Inc. may use and
sell HyperCD in the Exclusive Markets. The Buyer shall not license or
sub-license HyperCD to any other person or entity for use in the Exclusive
Markets.
Section 3.3 Update, Upgrade and Revise. Either party may update,
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upgrade or revise HyperCD or ▇▇▇▇ Hair Mail-Track software. The party making
such changes shall promptly deliver the changes to the other party on a CD-ROM
or on a medium selected by the receiving party.
Section 3.4 Introductions. The Buyer shall use its best efforts to
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introduce the Seller's HyperCD products and services, and ▇▇▇▇ Hair Mail-Track
products and services to ▇▇ ▇▇▇▇▇▇ Chase for the Exclusive Markets.
ARTICLE IV
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CLOSING
Section 4.1 The Closing. The closing of the transactions contemplated
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by this Agreement shall take place by executing documents for overnight mail
delivery on May 29, 2003 (the "Closing Date"), or by such other means or at
other specific time and place as agreed upon among the parties hereto (the
"Closing").
Section 4.2 Seller's Delivery and Execution. At the Closing the Seller
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shall deliver to Buyer: (i) certificates evidencing the Sharp Stock or a letter
from the Seller to the Seller's transfer agent that instructs the transfer agent
to issue the Sharp Stock, and the Sharp Warrants; (ii) ▇▇▇▇ of Sale for the
Purchased Assets and Assignment of Intellectual Property; (iii) the Assignment
of Contracts; (iv) the source code of HyperCD and; (v) Assignment of Lease.
Section 4.3 Buyer's Delivery and Execution. At the Closing, the Buyer
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shall deliver to the Seller: (i) $120,000 in cash, cashier's check, or wire
transfer at the Closing, or by the cancellation and voiding of the Existing
Note, in a manner satisfactory to the Seller; (ii) the New Note and Security
Agreement and; (iii) the HyperCD License.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
The Seller hereby represents and warrants to Buyer as follows:
Section 5.1. Organization, Good Standing and Qualification. The Seller
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(i) is an entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (ii) has all requisite power and
authority to carry on its business, and (iii) is duly qualified to transact
business and is in good standing in all jurisdictions where its ownership, lease
or operation of property or the conduct of its business requires such
qualification, except where the failure to do so would not have a material
adverse effect to the Seller. The authorized capital stock of the Seller
consists of 80,000,000 shares of common stock, par value $.001 per share, of
which 19,739,448 shares are validly issued and outstanding, and 20,000,000
shares of preferred stock, par value $.001 per share, of which no shares are
issued or outstanding. All of such issued and outstanding shares of the Seller
have been duly authorized, validly issued, fully paid and are non-assessable.
None of the shares were issued in violation of any preemptive rights.
Section 5.2 Ownership of the Purchased Assets. The Seller is the sole
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owner of the Purchased Assets free and clear of any liens, claims, equities,
charges, options, rights of first refusal, or encumbrances. The Seller has the
unrestricted right and power to transfer, convey and deliver full ownership of
the Purchased Assets without the consent or agreement of any other person and
without any designation, declaration or filing with any governmental authority
and upon the transfer of the Purchased Assets to the Buyer as contemplated
herein, Buyer will receive good and valid title thereto, free and clear of any
liens, claims, equities, charges, options, rights of first refusal, encumbrances
or other restrictions (except those that may be imposed by law).
Section 5.3 Authorization. The Seller is a corporation with full
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power, capacity, and authority to enter into this Agreement and perform the
obligations contemplated hereby by and for itself. All action on the part of
the Seller necessary for the authorization, execution, delivery and performance
of this Agreement by the Seller has been taken or will be taken prior to
Closing. This Agreement, when duly executed and delivered in accordance with its
terms, will constitute legal, valid, and binding obligations of the Seller
enforceable against the Seller in accordance with its terms, except as may be
limited by bankruptcy, insolvency, and other similar laws affecting creditors'
rights generally or by general equitable principles.
Section 5.4 No Breaches or Defaults. Except for the consent of the
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Landlord for the assignment of the lease for office space in New York City, the
execution, delivery, and performance of this Agreement by the Seller does not:
(i) conflict with, violate, or constitute a breach of or a default under, (ii)
result in the creation or imposition of any lien, claim, or encumbrance of any
kind upon the Purchased Assets, or (iii) require any authorization, consent,
approval, exemption, or other action by or filing with any third party or
governmental authority under any provision of: (a) any applicable legal
requirement, or (b) any credit or loan agreement, promissory note, or any other
agreement or instrument to which the Seller is a party or by which the Purchased
Assets may be bound or affected. For purposes of this Agreement, "Governmental
Authority" means any foreign governmental authority, the United States of
America, any state of the United States, and any agency, department, commission,
court, or similar entity, having jurisdiction over the parties hereto or their
respective assets or properties. For purposes of this Agreement, "Legal
Requirement" means any law, statute, injunction, decree, order or judgment (or
interpretation of any of the foregoing) of, and the terms of any license or
permit issued by, any Governmental Authority.
Section 5.5 Consents. With respect to the Assignment of Contract, and
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except as set forth in Exhibit 5.5, no permit, consent, approval or
authorization of, or designation, declaration or filing with any Governmental
Authority or any other person or entity is required on the part of the Seller in
connection with the execution and delivery by the Seller of this Agreement or
the consummation and performance of the transactions contemplated hereby other
than as required under the federal securities laws.
Section 5.6 Ownership of HyperCD. The Seller is the sole owner of
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HyperCD free and clear of any liens, claims, equities, charges, options, rights
of first refusal, or encumbrances except for the security interest granted to
the Buyer pursuant to the Existing Note. The Seller has the unrestricted right
and power to grant the HyperCD License without the consent or agreement of any
other person and without any designation, declaration or filing with any
governmental authority and upon the grant of the HyperCD License to the Buyer as
contemplated herein, Buyer will receive good and valid title thereto, free and
clear of any liens, claims, equities, charges, options, rights of first refusal,
encumbrances or other restrictions (except those that may be imposed by law and
except for the security interest granted to the Buyer pursuant to the Existing
Note).
Section 5.7 Pending Claims. There is no claim, suit, action or
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proceeding, whether judicial, administrative or otherwise, pending or, to the
best of the Seller's knowledge, threatened with respect to the transfer to Buyer
of the Purchased Assets or the performance of this Agreement by the Seller.
Section 5.8 Disclosure. No representation or warranty of the Seller
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contained in this Agreement (including the exhibits hereto) contains any untrue
statement or omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
Section 5.9 No Brokerage Commission. No broker or finder has acted for
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the Seller in connection with this Agreement or the transactions contemplated
hereby, and no person is entitled to any brokerage or finder's fee or
compensation in respect thereof based in any way on agreements, arrangements or
understandings made by or on behalf of Seller.
Section 5.10 No Default. To the knowledge of Seller, the office lease
in New York City is not in currently in default or delinquent and the Assumed
Liabilities are not currently in default or delinquent.
Section 5.11 Piggy-Back Registration Rights. If the Seller files any
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Registration Statement ("Registration Statement") pursuant to the Securities Act
of 1933, as amended (the "Securities Act") with the Securities and Exchange
Commission (the "Commission") on a form under which the Sharp Stock and the
shares of stock underlying the Sharp Warrants are permitted to be registered
(other than on a Form S-4 or S-8 Registration Statement or any successor form),
and subject to the Seller holding shares of Sharp Stock or Sharp Warrants at
the time of any such filing (the "Registration Shares"), Buyer shall include in
the Registration Statement all of the Registration Shares unless otherwise
directed in writing by the Buyer. All expenses incident to the Seller's
performance of its obligations under this Section, including without limitation,
all registration and filing fees, fees and expenses of compliance with
securities and Blue Sky laws, printing expenses, fees and disbursements of the
Seller's counsel, independent certified public accountants, and other persons
retained by the Seller (all such expenses being herein called "Registration
Expenses") will be borne by the Seller. The Buyer shall be responsible for all
discounts and commissions relating to the Registration Shares and for the fees
and expenses of counsel and other persons engaged by the Buyer.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer hereby represents and warrants to the Seller as follows:
Section 6.1 Authorization. The Buyer is a Limited Liability Company
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with full power, capacity, and authority to enter into this Agreement and
perform the obligations contemplated hereby by and for itself. All action on
the part of the Buyer necessary for the authorization, execution, delivery and
performance of this Agreement by the Buyer has been taken or will be taken prior
to Closing. This Agreement constitutes a valid and binding obligation of Buyer
enforceable against Buyer in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, and other laws of general application relating to or
affecting creditors' rights and to general equitable principles.
Section 6.2 Organization, Good Standing and Qualification. The Buyer
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(i) is an entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (ii) has all requisite power and
authority to carry on its business, and (iii) is duly qualified to transact
business and is in good standing in all jurisdictions where its ownership, lease
or operation of property or the conduct of its business requires such
qualification, except where the failure to do so would not have a material
adverse effect to the Buyer. ▇▇▇▇▇ ▇▇▇ is the sole member of the Buyer. All of
such issued and outstanding ownership interests of the Buyer have been duly
authorized, validly issued, fully paid and are non-assessable. None of the
ownership interests were issued in violation of any preemptive rights.
Section 6.3 Acquisition of Stock for Investment. The Buyer understands
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that the issuance of Sharp Stock and the Sharp Warrants will not have been
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities acts, and, accordingly, are restricted securities, and the
Buyer represents and warrants to the Seller that the Buyer's present intention
is to receive and hold the Sharp Stock and the Sharp Warrants for investment
only and not with a view to the distribution or resale thereof. Buyer further
represents and acknowledges that he is an Accredited Investor as that term is
defined in Rule 501(a) of Regulation D of the Act.
Additionally, the Buyer understands that any sale by the Buyer of any of
the Sharp Stock or the Sharp Warrants will, under current law, require either:
(a) the registration of the Sharp Stock or the Sharp Warrants under the Act and
applicable state securities acts; (b) compliance with Rule 144 of the Act; or
(c) the availability of an exemption from the registration requirements of the
Act and applicable state securities acts. The Buyer understands that the Seller
has not undertaken and does not presently intend to file a Registration
Statement to register the Sharp Stock and the Sharp Warrants that is to be
issued to the Buyer. The Buyer agrees to execute, deliver, furnish or otherwise
provide to the Seller an opinion of counsel reasonably acceptable to the Seller
prior to any subsequent transfer of the Sharp Stock and the Sharp Warrants, that
such transfer will not violate the registration requirements of the federal or
state securities acts. The Buyer agrees to execute, deliver, furnish or
otherwise provide to the Seller any documents or instruments as may be
reasonably necessary or desirable in order to evidence and record the Sharp
Stock and the Sharp Warrants acquired hereby.
To assist in implementing the above provisions, the Buyer hereby consents
to the placement of the legend, or a substantially similar legend, set forth
below, on all certificates representing ownership of the Sharp Stock and the
Sharp Warrants acquired hereby until the Sharp Stock and the Sharp Warrants have
been sold, transferred, or otherwise disposed of, pursuant to the requirements
hereof. The legend shall read substantially as follows:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES ACTS. THESE
SECURITIES MUST BE ACQUIRED FOR INVESTMENT, ARE RESTRICTED AS TO
TRANSFERABILITY, AND MAY NOT BE SOLD, HYPOTHECATED, OR OTHERWISE
TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION AND QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR
APPLICABLE EXEMPTIONS THEREFROM."
Section 6.4 Buyer's Access to Information. The Buyer hereby confirms
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and represents that it has received a copy of the Seller's Form 10-KSB for the
year ended December 31, 2002, and the Buyer: (a) has been afforded the
opportunity to ask questions of and receive answers from representatives of the
Seller concerning the business and financial condition, properties, operations
and prospects of the Seller. The Buyer has asked such questions about the Seller
as it desires to ask and all such questions have been answered to the full
satisfaction of the Buyer; (b) has such knowledge and experience in financial
and business matters so as to be capable of evaluating the relative merits and
risks of the transactions contemplated hereby; (c) has had an opportunity to
engage and is represented by an attorney of its choice; (d) has had an
opportunity to negotiate the terms and conditions of this Agreement; (e) has
been given adequate time to evaluate the merits and risks of the transactions
contemplated hereby; and (f) has been provided with and given an opportunity to
review all current information about the Seller.
Section 6.5 No Breaches or Defaults. Except as set forth in Exhibit
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6.5, the execution, delivery, and performance of this Agreement by Buyer does
not: (i) conflict with, violate, or constitute a breach of or a default under,
(ii) result in the creation or imposition of any lien, claim, or encumbrance of
any kind upon the ▇▇▇▇ Hair Mail-Track Software, or (iii) require any
authorization, consent, approval, exemption, or other action by or filing with
any third party or Governmental Authority under any provision of: (a) any
applicable Legal Requirement, or (b) any credit or loan agreement, promissory
note, or any other agreement or instrument to which Buyer is a party or by which
the ▇▇▇▇ Hair Mail-Track Software may be bound or affected.
Section 6.6 Consents. Except as set forth in Exhibit 6.6, no permit,
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consent, approval or authorization of, or designation, declaration or filing
with, any Governmental Authority or any other person or entity is required on
the part of Buyer in connection with the execution and delivery by Buyer of this
Agreement or the consummation and performance of the transactions contemplated
hereby other than as required under the federal securities laws.
Section 6.7 Pending Claims. There is no claim, suit, action or
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proceeding, whether judicial, administrative or otherwise, pending or, to the
best of Buyer' knowledge, threatened with respect to the grant to the Seller of
the ▇▇▇▇ Hair Mail-Track License or the performance of this Agreement by Buyer.
Section 6.8 No Additional Representations. Buyer acknowledges that the
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Seller has made no representations or warranties to Buyer as to the financial
condition or otherwise of the Seller other than as contained in the Form 10-KSB
of the Seller for the year ended December 31, 2002
Section 6.9 Disclosure. No representation or warranty of Buyer
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contained in this Agreement (including the exhibits hereto) contains any untrue
statement or omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
Section 6.10 No Brokerage Commission. No broker or finder has acted
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for the Buyer in connection with this Agreement or the transactions contemplated
hereby, and no person is entitled to any brokerage or finder's fee or
compensation in respect thereof based in any way on agreements, arrangements or
understandings made by or on behalf of Buyer.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 Conditions to Closing by the Buyer. The obligations of the
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Buyer to effect the transactions contemplated hereby are subject to:
(i) The Seller shall have made all of its deliveries contemplated herein
to the Buyer; and
(ii) The Board of Directors of the Seller shall have approved and
authorized the transactions contemplated herein.
Section 7.2 Conditions to Closing by the Seller. The obligations of the
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Seller to effect the transactions contemplated hereby are subject to:
(i) The Buyer shall have tendered all of its consideration contemplated
herein to the Seller;
(ii) The Buyer shall have made all of its deliveries contemplated herein to
the Seller; and
(iii) The sole member of the Buyer shall have approved and authorized the
transactions contemplated herein.
Section 7.3 Conditions to the Obligations of all Parties. The
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obligations of the Parties to effect the transactions contemplated hereby are
further subject to the following condition:
No action, suit or proceeding by or before any court or any governmental or
regulatory authority shall have been commenced or threatened, and no
investigation by any governmental or regulatory authority shall have been
commenced or threatened, seeking to restrain, prevent or challenge the
transactions contemplated hereby or seeking judgments against the Parties;
and all Consents of third parties have been obtained.
ARTICLE VIII
COVENANTS OF SELLER
Section 8.1 Seller's covenant to file reports with the Securities and
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Exchange Commission. The Seller covenants that it will file with the
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Securities and Exchange Commission all reports on Forms 10-KSB, 10-QSB, 8-K and
any other filings that makes the Seller's restricted stock owned by the Buyer
eligible for sale pursuant to Rule 144 of the Securities Act of 1933, as amended
(the "Act"). This covenant shall expire on December 31, 2008.
Section 8.2 Seller's covenant to cooperate with a Rule 144 sale and to
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arrange for a Rule 144 legal opinion. The Seller covenants that one year from
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the date of Closing it will arrange for a legal opinion (the "Legal Opinion") to
be provided to the Buyer in connection with the Buyer's proposed sale of
restricted stock of the Seller (the "Restricted Stock") pursuant to Rule 144 of
the Securities Act of 1933, as amended, (the "Restricted Stock Sale"), but only
if such a proposed Restricted Sale meets all of the conditions set forth in
Rule 144, as Rule 144 or its successor rules, if any, may be amended from time
to
time. This covenant shall be effective only at such time as the Buyer provides
the Seller with a copy of the Restricted Stock certificate (front and back), a
Rule 144 Notice of Sale, a representation letter from the Buyer about the sale
of the Restricted Stock and a representation letter from a broker-dealer
handling the Restricted Stock Sale, all of which shall meet the requirements as
set forth in Rule 144 of the Act. Sharp shall have five (5) business days to
deliver the Legal Opinion to the Buyer from the day the Buyer requests the legal
opinion and counsel for Buyer has provided the necessary information to render
the legal opinion or Seller shall provide Buyer or its legal counsel with a
written explanation as to why the information provided does not comply with Rule
144. After two (2) years, Seller further covenants that it will authorize and
direct the transfer agent to remove the legend on Buyer's stock certificate and
shall otherwise cooperate with Buyer to effectuate a sale of shares pursuant to
Rule 144k. This covenant shall expire on December 31, 2008.
Section 8.3 Failure to Comply with Sections 8.1 and 8.2. If the Seller
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fails to comply with the covenants set forth in Section 8.1 and Section 8.2
herein (collectively, the "Rule 144 Covenants"), and such failure to comply
lasts more than thirty (30) calendar days, then the license set forth in Section
3.1 herein shall be suspended until the Seller is in compliance with the Rule
144 Covenants. If the failure to comply lasts more than ninety (90) calendar
days the license shall be permanently revoked and be null and void.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification from the Seller. The Seller hereby agrees
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to and shall indemnify, defend (with legal counsel reasonably acceptable to
Buyer), and hold Buyer, its affiliates, agents, legal counsel, successors and
assigns (the "Buyer Group") harmless at all times after the date of this
Agreement, from and against any and all actions, suits, claims, demands, debts,
liabilities, obligations, losses, damages, costs, expenses, penalties or injury
(including reasonable attorneys' fees and costs of any suit related thereto)
suffered or incurred by any of the Buyer Group arising from (a) any
misrepresentation by, or breach of any covenant or warranty of the Seller
contained in this Agreement, or any exhibit, certificate, or other instrument
furnished or to be furnished by the Seller hereunder, (b) any nonfulfillment of
any agreement on the part of the Seller under this Agreement, or (c) from any
material misrepresentation in or material omission from, any certificate or
other instrument furnished or to be furnished to Buyer hereunder; or (d) any
suit, action, proceeding, claim or investigation against the Buyer which arises
from or which is based upon or pertaining to Seller's conduct or the operation
or liabilities of any business related to HyperCD prior to the Closing.
Section 9.2 Indemnification from Buyer. Buyer agrees to and shall
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indemnify, defend (with legal counsel reasonably acceptable to the Seller) and
hold the Seller, its affiliates, shareholders, officers, directors, employees,
agents, legal counsel, successors and assigns (the "Sellers Group") harmless at
all times after the date of the Agreement from and against any and all actions,
suits, claims, demands, debts, liabilities, obligations, losses, damages, costs,
expenses, penalties or injury (including reasonably attorneys' fees and costs of
any suit related thereto) suffered or incurred by any of the Sellers Group,
arising from (a) any misrepresentation by, or breach of any covenant or warranty
of Buyer contained in this Agreement or any exhibit, certificate, or other
agreement or instrument furnished or to be furnished by Buyer hereunder; (b)
any nonfulfillment of any agreement on the part of Buyer under this Agreement;
(c) from any material misrepresentation in or material omission from, any
exhibit, certificate or other agreement or instrument furnished or to be
furnished to the Seller hereunder; or (d) any suit, action, proceeding, claim or
investigation against the Seller which arises from or which is based upon or
pertaining to Buyer' conduct or the operation or liabilities of any business
related to ▇▇▇▇ Hair Track-Mail Software prior to the Closing.
Section 9.3 Defense of Claims. If any lawsuit or enforcement action is
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filed against any party entitled to the benefit of indemnity hereunder, written
notice thereof shall be given to the indemnifying party as promptly as
practicable (and in any event not less than fifteen (15) days prior to any
hearing date or other date by which action must be taken); provided that the
failure of any indemnified party to give
timely notice shall not affect rights to indemnification hereunder except to the
extent that the indemnifying party demonstrates actual damage caused by such
failure. After such notice, the indemnifying party shall be entitled, if it so
elects, to take control of the defense and investigation of such lawsuit or
action and to employ and engage attorneys of its own choice to handle and defend
the same, at the indemnifying party's cost, risk and expense; and such
indemnified party shall cooperate in all reasonable respects, at its cost, risk
and expense, with the indemnifying party and such attorneys in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom; provided, however, that the indemnified party may, at its own
cost, participate in such investigation, trial and defense of such lawsuit or
action and any appeal arising therefrom. The indemnifying party shall not,
without the prior written consent of the indemnified party, effect any
settlement of any proceeding in respect of which any indemnified party is a
party and indemnity has been sought hereunder unless such settlement of a claim,
investigation, suit, or other proceeding only involves a remedy for the payment
of money by the indemnifying party and includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
Section 9.4 Default of Indemnification Obligation. If an entity or
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individual having an indemnification, defense and hold harmless obligation, as
above provided, shall fail to assume such obligation, then the party or entities
or both, as the case may be, to whom such indemnification, defense and hold
harmless obligation is due shall have the right, but not the obligation, to
assume and maintain such defense (including reasonable counsel fees and costs of
any suit related thereto) and to make any settlement or pay any judgment or
verdict as the individual or entities deem necessary or appropriate in such
individual's or entities' absolute sole discretion and to charge the cost of any
such settlement, payment, expense and costs, including reasonable attorneys'
fees, to the entity or individual that had the obligation to provide such
indemnification, defense and hold harmless obligation and same shall constitute
an additional obligation of the entity or of the individual or both, as the case
may be.
ARTICLE X
MISCELLANEOUS
Section 10.1 Amendment; Waiver. Neither this Agreement nor any
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provision hereof may be amended, modified or supplemented unless in writing,
executed by all the parties hereto. Except as otherwise expressly provided
herein, no waiver with respect to this Agreement shall be enforceable unless in
writing and signed by the party against whom enforcement is sought. Except as
otherwise expressly provided herein, no failure to exercise, delay in
exercising, or single or partial exercise of any right, power or remedy by any
party, and no course of dealing between or among any of the parties, shall
constitute a waiver of, or shall preclude any other or further exercise of, any
right, power or remedy.
Section 10.2 Notices. Any notices or other communications required or
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permitted hereunder shall be sufficiently given if in writing and delivered in
person, transmitted by facsimile transmission (fax) or sent by registered or
certified mail (return receipt requested) or recognized overnight delivery
service, postage pre-paid, addressed as follows, or to such other address has
such party may notify to the other parties in writing:
(a) if to the Seller:
Sharp Holding Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Voice: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Voice: 713-861-1996
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to Buyer:
Octopus Media, LLC, attn: ▇▇▇▇▇ ▇. ▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Colts Neck, New Jersey zip 07722
Voice: ▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇▇ ▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇
Piro, Zinna, ▇▇▇▇▇▇▇ & Paris
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Voice: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
A notice or communication will be effective (i) if delivered in person or
by overnight courier, on the business day it is actually delivered, (ii) if
transmitted by telecopier, on the business day of actual confirmed receipt by
the addressee thereof, and (iii) if sent by registered or certified mail, three
(3) business days after dispatch.
Section 10.3 Severability. Whenever possible, each provision of this
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Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
Section 10.4 Assignment. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties. This Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective heirs, personal representatives, successors and assigns.
Section 10.5 Survival of Representations, Warranties and Covenants. All
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representations and warranties made in, pursuant to or in connection with this
Agreement shall survive the execution and delivery of this Agreement for a
period of two(2) years.
Section 10.6 Public Announcements. The parties hereto agree that prior
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to making any public announcement or statement with respect to the transactions
contemplated by this Agreement, the party desiring to make such public
announcement or statement shall consult with the other parties hereto and
exercise their best efforts to (i) agree upon the text of a joint public
announcement or statement to be made by all of such parties or (ii) obtain
approval of the other parties hereto to the text of a public announcement or
statement to be made solely by the party desiring to make such public
announcement; provided, however, that if any party hereto is required by law to
make such public announcement or statement, then such announcement or statement
may be made without the approval of the other parties.
Section 10.7 Entire Agreement. This Agreement and the other documents
----------------
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof and
thereof and supersede and cancel all prior representations, alleged warranties,
statements, negotiations, undertakings, letters, acceptances, understandings,
contracts and communications, whether verbal or written among the parties hereto
and thereto or their respective agents with respect to or in connection with the
subject matter hereof.
Section 10.8 Choice of Law. This Agreement shall be governed by, and
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construed in accordance with, the laws of the State of Texas, without regard to
principles of conflict of laws. In any action between or among any of the
parties, whether arising out of this Agreement or otherwise, each of the parties
irrevocably consents to the exclusive jurisdiction and venue of the federal and
state courts located in ▇▇▇▇▇▇ County, Texas.
Section 10.9 Counterparts and Facsimiles. This Agreement may be
-----------------------------
executed in multiple counterparts and in any number of counterparts, each of
which shall be deemed an original but all of which taken together shall
constitute and be deemed to be one and the same instrument and each of which
shall be considered and deemed an original for all purposes. This Agreement
shall be effective with the facsimile signature of any of the parties set forth
below and the facsimile signature shall be deemed as an original signature for
all purposes and the Agreement shall be deemed as an original for all purposes.
Section 10.10 Costs and Expenses. The Seller shall pay all of the
--------------------
fees and expenses incurred by it, and Buyer shall pay all of the fees and
expenses incurred by it in negotiating and preparing this Agreement (and all
other agreements executed in connection herewith or therewith) and in
consummating the transactions contemplated by this Agreement.
Section 10.11 Section Headings. The section and subsection headings in
----------------
this Agreement are used solely for convenience of reference, do not constitute a
part of this Agreement, and shall not affect its interpretation.
Section 10.12 No Third-Party Beneficiaries. Nothing in this Agreement
----------------------------
will confer any third party beneficiary or other rights upon any person that is
not a party to this Agreement.
Section 10.13 Validity. The invalidity or unenforceability of any
--------
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
Section 10.14 Further Assurances. Each party covenants that at any
-------------------
time, and from time to time, after the Closing Date, it will execute such
additional instruments and take such actions as may be reasonably requested by
the other parties to confirm or perfect or otherwise to carry out the intent and
purposes of this Agreement.
Section 10.15 Exhibits Not Attached. Any exhibits not attached hereto
---------------------
on the date of execution of this Agreement shall be deemed to be and shall
become a part of this Agreement as if executed on the date hereof upon each of
the parties initialing and dating each such exhibit, upon their respective
acceptance of its terms, conditions and/or form.
[Signatures Appear on the Next Page]
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed effective as of the day and year first above written.
Sharp Holding Corporation,
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇, President
Octopus Media LLC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-------------------------
▇▇▇▇▇ ▇. ▇▇▇, Sole Member