STOCK PURCHASE AND REORGANIZATION AGREEMENT
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NETLIVE COMMUNICATIONS, INC.
▇▇▇▇▇ INDUSTRIES PTY LIMITED
AND
PLAYBYRNE INVESTMENTS PTY LIMITED
BUDBOX PTY LIMITED
▇▇▇▇▇▇ ▇▇▇▇▇ PTY LIMITED
INTERCORP GROUP PTY LIMITED
HALLENDON PTY LIMITED
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLAYER
▇▇▇▇▇ ▇▇▇▇ PLAYER
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DATED AS OF JUNE 22, 1998
STOCK PURCHASE AND REORGANIZATION AGREEMENT
AGREEMENT dated as of June 22, 1998 by and among NetLive
Communications, Inc., a Delaware corporation ("NetLive"), ▇▇▇▇▇ Industries Pty
Limited ACN 082 218 102, an Australian corporation ("▇▇▇▇▇"), Budbox Pty
Limited ACN 050 213 271, an Australian corporation ("Budbox"), Playbyrne
Investments Pty Limited ACN 050 210 412, an Australian corporation
("Playbyrne"), ▇▇▇▇▇▇ ▇▇▇▇▇ Pty Limited ACN 006 087 369, an Australian
corporation ("▇▇▇▇▇▇," and, together with Budbox and Playbyrne, the "Player
Companies"), Intercorp Group Pty Limited ACN 082 594 241 ("Intercorp"),
Hallendon Pty Limited ACN 074 127 343 ("Hallendon") (Budbox, Playbyrne, ▇▇▇▇▇▇,
Intercorp and Hallendon are sometimes referred to herein individually as a
"Company" and collectively as the "Companies"), ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Player ("Mr.
Player"), ▇▇▇▇▇ ▇▇▇▇ Player ("Ms. Player") (Mr. Player, Ms. Player and the
Companies are sometimes referred to herein individually as a "Purchaser" and
collectively as the "Purchasers").
WHEREAS, ▇▇▇▇▇▇ is an Australian corporation engaged in the
manufactureand distribution of electric blankets, electric kettles and other
small electricappliances (the "Business");
WHEREAS, ▇▇▇▇▇ is a newly formed Australian corporation formed for the
purpose of acquiring certain of the assets (the "Assets") of the Business as
described in Section 1.11 hereto;
WHEREAS, the capital stock of ▇▇▇▇▇ consists of, or will prior to the
Closing (as hereinafter defined) consist of Ten Million (10,000,000) authorized
ordinary shares ("▇▇▇▇▇ Common Stock"), of which one (1) share is issued and
outstanding and owned, or will prior to the Closing be owned by NetLive;
WHEREAS, NetLive is a public corporation subject to the reporting
requirements of Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and its common stock, par value (U.S.) $.0001 per share
(the "Common Stock"), and warrants (the "Public Warrants") traded on The NASDAQ
SmallCap Market system ("NASDAQ");
WHEREAS, it is contemplated that the Purchasers shall purchase (the
"NetLive Purchase") from NetLive an aggregate of (i) Eight Million (8,000,000)
shares of Common Stock (subject to certain adjustments); and (ii) One Million
(1,000,000) shares of non-voting Series A Convertible Preferred Stock (the
"NetLive Preferred Stock," and, together with the Common Stock, the "NetLive
Securities");
WHEREAS, the NetLive Purchase is subject to, among other items, the
shareholders of NetLive approving at a shareholders' meeting the NetLive
Purchase, a reverse stock split of theissued and outstanding Common Stock of
NetLive and a name change from NetLive Communications, Inc. to ▇▇▇▇▇
Industries, Inc.;
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WHEREAS, it is contemplated that immediately following the NetLive
Purchase, NetLive shall subscribe for and ▇▇▇▇▇ shall allot to NetLive One
Million Six Hundred Sixty Six Thousand Six Hundred Sixty Seven (1,666,667)
fully paid shares of ▇▇▇▇▇ Common Stock (the "▇▇▇▇▇ Shares") at par for an
amount of One Million Six Hundred Sixty Six Thousand Six Hundred Sixty Seven
(AUD $1,666,667) Australian Dollars (the "▇▇▇▇▇ Share Acquisition") on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, it is contemplated that immediately following the NetLive
Purchase, and simultaneous with the ▇▇▇▇▇ Share Acquisition, NetLive shall lend
to ▇▇▇▇▇, and ▇▇▇▇▇ shall borrow from NetLive (the "NetLive Loan") the sum of
Three Million Three Hundred Thirty Three Thousand Three Hundred Thirty Three
(AUD $3,333,333) Australian Dollars pursuant to a promissory note in
substantially the form attached hereto as Exhibit A (the "NetLive Note");
WHEREAS, it is contemplated that immediately following the NetLive
Purchase, and simultaneous with the ▇▇▇▇▇ Share Acquisition, pursuant to one or
more trademark assignments substantially in the form attached hereto as Exhibit
B (the "Trademark Assignments") NetLive will acquire the registered trade marks
used in connection with the Business and identified in Schedule 0.01 hereof
(the "Brand Names") for Five Million (AUD $5,000,000) Australian Dollars (the
"Brand Name Purchase");
WHEREAS, it is contemplated that immediately following the NetLive
Purchase, and simultaneous with the ▇▇▇▇▇ Share Acquisition, ▇▇▇▇▇ will enter
into one or more license agreements with NetLive with respect to the Brand
Names, substantially in the form attached hereto as Exhibit C (the "Licenses");
WHEREAS, it is contemplated that immediately following the NetLive
Purchase, and simultaneous with the ▇▇▇▇▇ Share Acquisition, ▇▇▇▇▇ will acquire
the Assets (the "▇▇▇▇▇ Business Sale") for Nineteen Million (AUD $19,000,000)
Australian Dollars, subject to certain adjustments as set forth in the ▇▇▇▇▇
Business Sale Agreement (as hereinafter defined);
WHEREAS, in order to consummate the ▇▇▇▇▇ Asset Purchase, it is
contemplated that prior to the ▇▇▇▇▇ Asset Purchase, ▇▇▇▇▇ will secure a bank
loan or credit facility of no less than AUD $10,000,000 (the "Loan," and
together with the ▇▇▇▇▇ Share Acquisition, the NetLive Purchase, the ▇▇▇▇▇
Asset Purchase, the NetLive Loan, the Brand Name Purchase and the transactions
contemplated by the Licenses, the "Transactions"), which funds shall be used
together with other available funds of ▇▇▇▇▇ and a promissory note of ▇▇▇▇▇ to
purchase the Assets;
WHEREAS, it is contemplated that following the closing of the
Transactions, ▇▇▇▇▇ will be a wholly-owned subsidiary of NetLive and will own
substantially all of the Assets, other than the Brand Names and certain
excluded receivables as provided in the ▇▇▇▇▇ Business Sale Agreement.
NOW, THEREFORE, in consideration of the mutual agreements recited
herein, the parties hereto hereby agree as follows:
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ARTICLE I
THE TRANSACTIONS
1.01 The NetLive Purchase. Subject to the adjustment provisions set
forth in Section 5.05 of this Agreement, the Purchasers shall pay NetLive the
aggregate sum of Ten Million (AUD $10,000,000) Australian Dollars in
consideration of the sale, transfer and delivery of (i) Eight Million
(8,000,000) shares of Common Stock, and (ii) One Million (1,000,000) shares of
NetLive Preferred Stock in such amounts as are set forth in Schedule 1.01
hereof. Schedule 1.01 also sets forth certain assignees of the Purchasers who
will be assigned shares of Common Stock immediately after the Closing. The
NetLive Preferred Stock will have the terms set forth in Section 1.02 of this
Agreement.
1.02 NetLive Preferred Stock. The NetLive Preferred Stock will be a
newly authorized class of preferred stock to be issued by NetLive. The NetLive
Preferred Stock will be non-voting and have a liquidation value of AUD $1.00
per share. The NetLive Preferred Stock will be convertible into up to 1,000,000
shares of Common Stock of NetLive as follows: for each (U.S.) $200,000 of Net
Income (as defined below) in excess of a sum in U.S. Dollars equivalent to AUD
$3,571,429 at the then prevailing currency exchange rate as listed by Citibank,
N.A., for the fiscal years ended 1999, 2000 and 2001, the Purchasers may, at
their option, convert up to an aggregate 200,000 shares of NetLive Preferred
Stock into Common Stock (such conversion rights to be exercisable by the
Purchasers in proportion to their respective holdings of Preferred Stock), up
to a maximum of an aggregate of 1,000,000 shares of Common Stock. Immediately
prior to the Closing Date, the Company shall have filed with the State of
Delaware a Certificate of Designation (the "Preferred Certificate") setting
forth the terms of the NetLive Preferred Stock, substantially in the form
attached hereto as Exhibit D. The Preferred Certificate shall be on the terms
and conditions as set forth herein and as mutually acceptable to the parties
hereto.
1.03 Definitions. As used in this Article I, the following terms are
defined as follows:
(a) GAAP. United States generally accepted accounting
principles consistently applied.
(b) Net Income. In any given fiscal year, NetLive's audited
consolidated net after-tax income, computed by Coopers & ▇▇▇▇▇▇▇ or
other major accounting firm then regularly retained by NetLive, in
accordance with GAAP and Regulation S-X promulgated under the
Securities Act of 1933, as amended (the "Act").
1.04 Regarding the NetLive Securities. With respect to their purchase
of the NetLive Securities, each Purchaser represents and warrants as follows
solely as to itself:
(a) The NetLive Securities to be acquired by such Purchaser pursuant
to the terms of this Agreement are being acquired for his own account, with no
intention of assigning any participation or interest therein (other than the
transfer, pursuant to an exemption from registration under the Act, of
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(i) 200,000 shares of Common Stock from Intercorp to Intercorp Group Holdings
Pty Limited ACN 082 594 205 ("Intercorp Holdings"), an Australian corporation
andan affiliate of Intercorp; (ii) 300,000 shares of Common Stock from the
PlayerCompanies, or any of them, to Intercorp, to be transferred no later than
twoyears after the Closing Date pursuant to the terms of the Intercorp Services
Agreement (as hereinafter defined) and immediately thereafter, from Intercorp
to Intercorp Holdings; (iii) 100,000 shares of Common Stock from the Player
Companies, or any of them, to Gusrae, ▇▇▇▇▇▇ and ▇▇▇▇▇; (iv) 50,000 shares of
Common Stock, from the Player Companies, or any of them, to Keeldon Industries,
and 200,000 shares of Common Stock from the Player Companies, or any of them,
to Magic Consulting Group, Inc., pursuant to an oral arrangement between the
Player Companies and Magic Consulting Group, Inc. dated February 9, 1998 (the
"Magic Arrangements"), each such transfer contemplated to occur immediately
after the Closing), and without a view to the distribution of any portion
thereof, except in accordance with the Act.
(b) Each Purchaser will not sell, assign, transfer or encumber any of
such securities unless (i) a registration statement under the Act with respect
thereto is in effect and the prospectus included therein meets the requirements
of Section 10 of the Act, (ii) a no-action letter is obtained from the staff of
the Securities and Exchange Commission (the "Commission") in respect of such
proposed sale, assignment, transfer or encumbering, or (iii) NetLive has
received a written opinion of counsel reasonably satisfactory to NetLive that,
after an investigation of the relevant facts, such counsel is of the opinion
that such proposed sale, assignment, transfer or encumbering does not require
registration under the Act. Each Purchaser understands that the NetLive
Securities are not being registered under the Act and must be held indefinitely
unless it is subsequently registered thereunder or an exemption from such
registration is available.
(c) Each Purchaser has been given the opportunity to ask questions of,
and receive answers from, NetLive concerning NetLive and the NetLive Securities
and to obtain such additional information, to the extent NetLive possesses such
information or can acquire it without unreasonable effort or expense, necessary
to verify the accuracy of same as the Purchasers reasonably desire in order to
evaluate NetLive and the NetLive Securities, and the Purchasers have had the
opportunity to discuss any questions regarding NetLive or the NetLive
Securities with his counsel or other advisor. The Purchasers do not desire to
receive any further information.
(d) The purchase of the NetLive Securities is a speculative investment
involving a high degree of risk, there is no guarantee that the Purchasers will
realize any gain from this investment, and the Purchasers could lose the total
amount of their investment.
(e) Each Purchaser has no need for liquidity in this investment in the
NetLive Securities.
(f) Each Purchaser is an "accredited investor," as such term is
defined in Rule 501 of Regulation D promulgated under the Act. Each Purchaser
has such experience and sophistication in such investments as to make such
Purchaser fully capable of evaluating the risks and investment merits of an
investment in the NetLive Securities.
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(g) Each Purchaser is financially able to bear the economic risk of an
investment in the NetLive Securities, including the ability to hold the NetLive
Securities indefinitely, or to afford a complete loss of his or its investment
in the NetLive Securities.
(h) This Agreement constitutes the valid and binding obligation of
each of the Purchasers and is enforceable against each of the Purchasers in
accordance with its terms, except as may be limited by federal bankruptcy laws
and regulations.
(i) Each of the Companies is a corporation duly incorporated, validly
existing and in good standing under the laws of Australia. Each of the
Companies is duly qualified to conduct its business and is in good standing as
a foreign corporation in such jurisdictions as its business is now conducted
(except for such jurisdictions where the failure to so qualify would not have a
material adverse effect on such Company), and there has not been any claim by
any other jurisdiction to the effect that any Company is required to qualify or
otherwise be authorized to do business as a foreign corporation therein.
(j) All requisite consents of governments and other regulatory
agencies, foreign or domestic, and of any other parties, required to be
received by or on the part of the Purchasers, to enable any of them to enter
into and carry out their purchase of the NetLive Securities in all material
respects, have been, or prior to the Closing (as defined in Section 7.01 of
this Agreement), will have been obtained.
1.06 The ▇▇▇▇▇ Share Acquisition. Subject to the terms and conditions
of this Agreement, and in reliance on the representations and warranties set
forth herein, immediately following the NetLive Purchase, NetLive will
subscribe for and ▇▇▇▇▇ will allot to NetLive the ▇▇▇▇▇ Shares, free and clear
of all liens, pledges, encumbrances, charges and claims (collectively, "Liens")
thereon, other than Liens resulting primarily from (i) actions of NetLive and
(ii) restrictions on transfer due to federal or state securities laws, which
restrictions are in no way caused, in whole or in part, by any failure of ▇▇▇▇▇
to comply with such laws thereon.
1.07 Purchase Price of the ▇▇▇▇▇ Shares. In consideration of the
allotment and delivery of the ▇▇▇▇▇ Shares to NetLive in the ▇▇▇▇▇ Share
Acquisition, on the Closing Date, NetLive will pay to ▇▇▇▇▇ the subscription
monies of One Million Six Hundred Sixty Six Thousand Six Hundred Sixty Seven
(AUD $1,666,667) Australian Dollars.
1.08 The NetLive Loan. Subject to the terms and conditions of this
Agreement, and in reliance on the representations and warranties set forth
herein and in the other Agreements (as hereinafter defined), immediately
following the NetLive Purchase, NetLive will transfer to ▇▇▇▇▇, in immediately
available funds, the sum of Three Million Three Hundred Thirty Three Thousand
Three Hundred Thirty Three (AUD $3,333,333) Australian Dollars, and ▇▇▇▇▇ will
deliver to NetLive the NetLive Note, together with such instruments securing
Linda's obligations under the NetLive Note and such other documents as may be
contemplated by the NetLive Note.
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1.09 The Brand Name Purchase. Subject to the terms and conditions of
this Agreement, and in reliance on the representations and warranties set forth
herein, immediately following the NetLive Purchase, ▇▇▇▇▇▇ will deliver fully
executed Trademark Assignments, together with such other instruments of
transfer and other documents as may be necessary or expedient in order to fully
effect the Brand Name Purchase, and in consideration therefor, NetLive will
transfer to ▇▇▇▇▇▇, in immediately available funds, the sum of Five Million
(AUD $5,000,000) Australian Dollars.
1.10 The Licenses. Subject to the terms and conditions of this
Agreement, and in reliance on the representations and warranties set forth
herein, immediately following the NetLive Purchase, NetLive and ▇▇▇▇▇ will
execute and deliver the Licenses.
1.11 The ▇▇▇▇▇ Sale of Business. Immediately subsequent to or
simultaneously with the ▇▇▇▇▇ Share Acquisition, ▇▇▇▇▇ shall acquire the Assets
from ▇▇▇▇▇▇, pursuant to the terms and conditions of a Sale of Business
Agreement (the "▇▇▇▇▇ Sale of Business Agreement" and, together with the
NetLive Note, the Trademark Assignments, the Licenses and this Agreement, the
"Agreements") substantially in the form attached hereto as Exhibit E, in
consideration of the payment by ▇▇▇▇▇ to ▇▇▇▇▇▇ of Nineteen Million (AUD
$19,000,000) Australian Dollars (the "Asset Purchase Price"). The Asset
Purchase Price will consist of (i) AUD $15,000,000, of which AUD $10,000,000
will be from the Loan, and (ii) AUD $4,000,000, subject to certain adjustments
as set forth in the ▇▇▇▇▇ Sale of Business Agreement, will be in the form of a
promissory note substantially as annexed to the ▇▇▇▇▇ Sale of Business
Agreement.
1.12 Reverse Stock Split. Immediately prior to the Closing of the
NetLive Purchase, NetLive shall have effectuated, in accordance with all
applicable laws, rules and regulations and its By-Laws and Certificate of
Incorporation, including, but not limited to, the Delaware General Corporation
Laws and the federal securities laws, a reverse stock split (the "Reverse
Split") of each issued and outstanding share of Common Stock, so that
immediately following such reverse split, but prior to the NetLive Purchase,
there are no more than 1,000,000 shares of Common Stock and no shares of
NetLive Preferred Stock issued and outstanding.
1.13 Cancellation of Options, Warrants, Etc. At or prior to the
Closing Date there will be no more than 25,000 (on a post-Reverse Split basis)
vested and outstanding options, warrants, and other rights to purchase shares
of Common Stock for which the exercise price is less than (U.S.) $13.25 (on a
post-Reverse Split basis) per share of Common Stock (collectively, the above
such options, warrants, and other rights to purchase shares of Common Stock for
which the exercise price per share of Common Stock is less than (U.S.) $13.25,
on a post-Reverse Split basis, are hereinafter referred to as "Rights"). All
Rights held by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
and/or ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be canceled prior to Closing, and NetLive shall use
its best efforts to cancel all other vested and outstanding Rights prior to
Closing.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF BUDBOX
Budbox makes the following representations and warranties to NetLive.
NetLive, in executing, delivering and consummating this Agreement, has relied
and will rely upon the correctness and completeness of each of such
representations and warranties:
2.01 Valid Corporate Existence Qualification; Authority. ▇▇▇▇▇▇ is a
corporation duly incorporated, validly existing and in good standing under the
laws of Australia. ▇▇▇▇▇▇ has the corporate power to carry on the Business as
now conducted and to own the Assets. ▇▇▇▇▇▇ is duly qualified to conduct the
Business and is in good standing as a foreign corporation in such jurisdictions
as the Business is now conducted (except for such jurisdictions where the
failure to so qualify would not have a material adverse effect on ▇▇▇▇▇▇), and
there has not been any claim by any other jurisdiction to the effect that
▇▇▇▇▇▇ is required to qualify or otherwise be authorized to do business as a
foreign corporation therein. The copies of ▇▇▇▇▇▇'▇ Certificate of
Incorporation, as amended to date, which will be delivered to NetLive at
Closing (as defined in Section 7.01 of this Agreement), will be true and
complete copies of those documents as then in effect.
2.02 Capitalization. The authorized capital stock of ▇▇▇▇▇▇ consists
of Ten Thousand (10,000) ordinary shares, $1.00 AUD par value per share, of
which twelve (12) shares are issued and outstanding.
2.03 Subsidiaries. ▇▇▇▇▇▇ has no subsidiaries.
2.04 Consents. Except as set forth in Schedule 2.04, all requisite
consents of governments and other regulatory agencies, foreign or domestic, and
of any other parties, required to be received by or on the part of the
Purchasers, to enable any of them to enter into and carry out all of the
transactions contemplated in this Agreement in all material respects, have
been, or prior to the Closing (as defined in Section 7.01 of this Agreement),
will have been obtained.
2.05 Binding Nature of Agreement. This Agreement constitutes each of
the Purchasers' valid and binding obligation and is enforceable in accordance
with its terms, except as may be limited by federal bankruptcy laws and
regulations.
2.06 Financial Statements. The audited financial statements of ▇▇▇▇▇▇
for the years ended June 30, 1997 and 1996 being prepared by Coopers & ▇▇▇▇▇▇▇,
and the unaudited financial statements of ▇▇▇▇▇▇ for the quarter and the nine
months ended March 31, 1998 (collectively, the "Business Financial Statements")
to be delivered to NetLive on or about June 22, 1998 are financial statements
accurately reflecting the income, expenses, assets and liabilities in all
material respects of the Business. The Business Financial Statements will be
prepared in accordance with GAAP and Regulation S-X under the Act. The Business
Financial Statements will fairly represent the financial position of the
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Business at the applicable dates and the results of operations of the Business
for such periods and disclose all material liabilities and debts.
2.07 Insurance. Schedule 2.07 to be delivered at the Closing, sets
forth a list and brief description of all insurance policies held by ▇▇▇▇▇▇ as
of the date of the Closing. Except as set forth in Schedule 2.07, such policies
are valid, outstanding and enforceable policies, as to which premiums have been
paid currently.
2.08 Litigation, Compliance with Law. Except as set forth on Schedule
2.08, there are no actions, suits, proceedings or governmental investigations
relating to ▇▇▇▇▇▇ or to any of the Assets or the Business pending or, to the
knowledge of Budbox, threatened, or any order, injunction, award or decree
outstanding against ▇▇▇▇▇▇ or against or relating to any of the Assets or the
Business. Except as set forth in Schedule 2.08 to be delivered at the Closing,
to the best knowledge of Budbox, ▇▇▇▇▇▇ is not in violation of any law,
regulation, ordinance, order, injunction, decree, award or other requirement of
any governmental body, court or arbitrator relating to the Assets or the
Business which violation could have a material adverse effect on ▇▇▇▇▇▇.
2.09 Real Property. Schedule 2.09 to be delivered at the Closing, sets
forth a brief description of all real property which is owned by, or leased to
▇▇▇▇▇▇. ▇▇▇▇▇▇ owns outright the fee simple title in and to the real properties
shown on Schedule 2.09, to be delivered at the Closing, as being owned by it,
free and clear of all claims, liens, mortgages, charges, or encumbrances of any
nature whatsoever, except as otherwise described on Schedule 2.09. The real
property leases described in Schedule 2.09 that relate to the leased properties
described therein are now in full force and effect, and all material amounts
payable thereunder have been paid. All uses of such owned or leased property by
▇▇▇▇▇▇ conform, in all material respects, to all applicable building and zoning
ordinances, laws, and regulations and, in the case of leased property, to all
terms of the lease relating thereto.
2.10 Condition of Assets. Except for normal breakdowns and servicing
requirements, substantially all machinery and equipment regularly used in the
conduct of the Business is in reasonably good operating condition and repair,
ordinary wear and tear excepted.
2.11 Permits and Licenses. Schedule 2.11 sets forth all permits,
licenses, orders, franchises and approvals from all federal, state, local and
foreign governmental regulatory bodies held by ▇▇▇▇▇▇. ▇▇▇▇▇▇ has all permits,
licenses, orders, franchises and approvals of all federal, state, local and
foreign governmental or regulatory bodies required of it to carry on the
Business as presently conducted in all material respects; all such other
permits, licenses, orders, franchise and approvals are in full force and
effect; and ▇▇▇▇▇▇ is in compliance in all material respects with all
requirements, standards and procedures of the federal, state, local and foreign
governmental bodies which have issued such permits, licenses, orders,
franchises and approvals.
2.12 No Breach. Except as set forth in Schedule 2.12, neither the
execution and delivery of this Agreement nor compliance by the Purchasers with
any of the provisions hereof nor the consummation of the transaction
contemplated hereby will:
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(a) violate or conflict with any provision of the Certificate
of Incorporation of ▇▇▇▇▇▇;
(b) violate or, alone or with notice of the passage of time,
result in the material breach or termination of, or otherwise give any
contracting party the right to terminate, or declare a material
default under, the terms of any agreement or other document or
undertaking, oral or written to which ▇▇▇▇▇▇ is a party or by which it
or any of the Assets may be bound (except for such violations,
conflicts, breaches or defaults as to which required waivers or
consents by other parties have been, or will, prior to the Closing,
be, obtained or which will not have a material adverse effect on any
of such entities);
(c) result in the creation of any lien, security interest,
charge or encumbrances upon any of the Assets pursuant to the terms of
any such agreement or instrument;
(d) violate any judgment, order, injunction, decree or award
against, or binding upon ▇▇▇▇▇▇ or the Assets; or
(e) violate any law or regulation of any jurisdiction
relating to ▇▇▇▇▇▇ or any of its securities or the Assets.
2.13 Due Diligence. To the best of Budbox's knowledge all documents
and other materials relating to ▇▇▇▇▇▇ or the Business and provided to NetLive
in connection with the Transactions are true and correct in all material
respects, other than those materials which were superseded or corrected by
written materials provided to NetLive, which superseding or correcting
materials are true and correct in all material respects.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NETLIVE
NetLive makes the following representations and warranties to the
Purchasers. In executing this Agreement, the Purchasers have each relied and
will rely on the correctness and completeness of such representations and
warranties.
3.01 Valid Corporate Existence; Qualification. NetLive is a
corporation duly organized validly existing and in good standing under the laws
of the State of Delaware. NetLive has the corporate power to carry on its
business as now conducted and to own its assets. NetLive is duly qualified to
conduct business and is in good standing as a foreign corporation in those
jurisdictions set forth on Schedule 3.01, which are the only jurisdictions in
which NetLive is required to qualify in order to own its assets or properties
or to carry on its business as now conducted (except for such jurisdictions
where the failure to so qualify would not have a material adverse effect on
NetLive), and there has not been any claim by any other jurisdiction to the
effect that NetLive is required to qualify or otherwise be authorized to do
business as a foreign corporation therein (except for such jurisdictions
-9-
where the failure to so qualify would not have a material adverse effect on
NetLive). The copies of NetLive's Certificate of Incorporation (certified by
the Secretary of State of Delaware) and By-Laws (certified by NetLive's
secretary), as amended to date, which will be delivered to the Purchasers prior
to the Closing, are true and complete copies of those documents as now in
effect. The minute books of NetLive contain accurate records of all material
meetings of its Board of Directors and shareholders since its incorporation,
and accurately reflect in all material respects all transactions authorized by
such persons in such capacities including, without limitation, actions
authorized by written consent in lieu of a meeting.
3.02 Capitalization. The authorized, issued and outstanding Common
Stock, preferred stock, options and warrants, including the terms thereof
(namely, the amounts, the names of the holders thereof, the terms, and the
exercise prices with regard to all securities other than shares of Common
Stock, and with regard to Common Stock, the names and amounts held of record by
each NetLive shareholder, officer, director, affiliate, and any 5% or greater
shareholder known to NetLive), of NetLive is set forth on Schedule 3.02. Other
than the NetLive Securities to be issued pursuant to this Agreement, NetLive
has authorized (i) 19,000,000 shares of Common Stock, and (ii) 1,000,000 shares
of "blank check" Preferred Stock, of which as of the date hereof (i) 2,950,000
shares of Common Stock, and (ii) no shares of Preferred are issued and
outstanding. NetLive has 2,533,228 shares issuable upon outstanding options,
warrants, rights, calls, or other commitments or agreements (the "Derivative
Rights"). All of the issued and outstanding shares are duly authorized and
validly issued and outstanding, fully paid and nonassessable. Except for the
Derivative Rights and the NetLive Securities to be issued pursuant hereto, and
except as set forth on Schedule 3.02 hereto, there are no subscriptions,
options, warrants, rights or calls or other commitments or agreements to which
NetLive is a party or by which any of its officers, directors, or, to NetLive's
best knowledge any of its affiliates or any other person is bound, calling for
the issuance, transfer, sale or other disposition of any class of securities of
NetLive.
3.03 Subsidiaries. There are no corporations, partnerships or other
business entities controlled by NetLive except as set forth on Schedule 3.03
(the "Subsidiaries"). As used herein, "controlled by" means (i) the ownership
of not less than 50% of the voting securities or other interests of a
corporation, partnership or other business entity, or (ii) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a corporation, partnership or other business entity,
whether through the ownership of voting shares, by contract or otherwise.
NetLive has not made any investments in, nor does it own, any of the capital
stock of, or any other proprietary interest in, any other corporation,
partnership or other business entity.
3.04 Consents. Except as set forth in Schedule 3.04, all requisite
consents of governmental and other regulatory agencies, foreign or domestic,
and of other parties required to be received by or on the part of NetLive to
enable NetLive to enter into and carry out this Agreement and the Transactions
in all material respects have been, or prior to the Closing will have been,
obtained.
3.05 Binding Nature of Agreement; Title to NetLive Securities. This
Agreement constitutes NetLive's valid and binding obligation and is enforceable
in accordance with its terms, except as may be limited by federal bankruptcy
laws and regulations. The NetLive Securities to be issued to the
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Purchasers, when issued in accordance with the terms hereof, will be duly
authorized, validly issued and vest to each Purchaser, free and clear of any
Liens, other than Liens resulting primarily from (i) actions of the Purchasers,
or any of them, and (ii) restrictions on transfer due to federal or state
securities laws, which restrictions are in no way caused, in whole or in part,
by any failure of NetLive to comply with such laws.
3.06 Financial Statements. The books of account of NetLive fairly
reflect its income, expenses, assets and liabilities in all material respects.
The audited financial statements of NetLive for the years ended March 31, 1997
and 1996 and the unaudited financial statements for the nine (9) months ended
December 31, 1997 (collectively, the "NL Financial Statements"), fairly present
the financial position of NetLive as at the said dates and the results of its
operations for such fiscal years and period in all material respects, subject
to (i) necessary adjustments, if any, upon discontinuance of NetLive's
business, and (ii) year end audit adjustments, the lack of footnotes, and other
presentation items.
3.07 Liabilities. Except as set forth on Schedule 3.07, as at December
31, 1997 (the "Balance Sheet Date"), NetLive had no material debts, liabilities
or obligations, contingent or absolute, other than those debts, liabilities and
obligations reflected or reserved against on NetLive's Balance Sheet, or in the
footnotes thereto, at the Balance Sheet Date (the "Balance Sheet"). Except as
set forth on Schedule 3.07, from and after the Balance Sheet Date through the
date hereof, NetLive has not incurred any material debts, liabilities or
obligations, contingent or absolute, other than those arising in the ordinary
course of NetLive's business. Notwithstanding anything to the contrary
contained in this Agreement, the Purchasers acknowledge that since March 5,
1998 (and earlier with respect to preparatory measures taken) NetLive has
ceased its historic operations. As a result, for all purposes of this
Agreement, including, without limitation, the provisions of Articles III and
IV, all references to the ordinary and usual course of business, or words to
that effect, of NetLive shall include after such date preparing for and
implementing the winding up of its operations and related activities including,
without limitation, the termination of its personnel; settling and/or
negotiating the settlement of certain litigation, claims and contractual
commitments; preparing for a merger and/or other transactions analogous to the
transactions contemplated herein and similar activities.
3.08 Action Since Balance Sheet Date. Except as set forth in Schedule
3.08, since the Balance Sheet Date, NetLive has not: (i) issued or sold, or
agreed to issue or sell any of its capital stock, options, warrants, rights or
calls to purchase such stock, any securities convertible or exchangeable into
such capital stock or other corporate securities, or effected any subdivision
or other recapitalization affecting its capital stock; (ii) incurred any
material obligation or liability, absolute or contingent, except those arising
in the ordinary and usual course of its business; (iii) discharged or satisfied
any lien or encumbrance, except in the ordinary and usual course of business,
or paid or satisfied any liability, absolute or contingent, other than
liabilities as of the Balance Sheet Date and current liabilities incurred since
the Balance Sheet Date in the ordinary and usual course of business; (iv) made
any wage or salary increases or granted any bonuses other than wage and salary
increases and bonuses granted in accordance with its normal salary increase and
bonus policies; (v) mortgaged, pledged or subjected to any lien or other
encumbrance any of its properties or assets, or permitted any
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of its property or assets to be subjected to any lien or other encumbrance,
except in the ordinary and usual course of business; (vi) sold, assigned or
transferred any of its properties or assets, except in the ordinary and usual
course of business; (vii) waived any rights of substantial value, or cancelled,
modified or waived any indebtedness for borrowed money held by it, except in
the ordinary and usual course of business; (ix) declared, paid or set aside any
dividends or other distributions or payments on its capital stock, or redeemed
or repurchased, or agreed to redeem or repurchase, any shares of its capital
stock; or (x) made any loans or advances to any person, or assumed, guaranteed,
endorsed or otherwise became responsible for the obligations of any person.
3.09 Adverse Developments. Except as otherwise expressly provided or
set forth in Schedule 3.09 hereto, or required by, this Agreement, since March
5, 1998, there have been no changes in the properties, operations or financial
condition of NetLive, other than those changes incurred in the ordinary course
of business, that have had a materially adverse effect upon the business of
NetLive.
3.10 Ownership of Assets. Schedule 3.10 provides a complete list of
all assets (tangible and intangible) of NetLive valued individually in excess
of Three Thousand (AUD $3,000) Australian Dollars. Except as set forth in
Schedule 3.10, NetLive owns outright, and has good and marketable title to all
of its assets, properties and business (including all assets reflected in the
Balance Sheet, except as the same may have been disposed of in the ordinary
course of business since the Balance Sheet Date), free and clear of all Liens.
Schedule 3.10 sets forth a true and complete list and brief description of all
patents, copyrights, trademarks, trade names and other similar intangible
assets which are either owned or licensed by NetLive or in which it has an
interest. Except as set forth on Schedule 3.10, to the knowledge of NetLive, no
other person, firm or corporation has any proprietary or other interest in any
such intangible assets. Except as set forth on Schedule 3.10, NetLive is not a
party to or bound by any license or agreement requiring the payment to any
person, firm or corporation of any royalty. Except as set forth on Schedule
3.10, NetLive does not know of, nor does it have reasonable grounds to know of,
any violation by others of the trademark, trade name or patent rights of
NetLive. NetLive, to the best of its knowledge is not infringing upon any
patent, copyright, trade name or trademark or otherwise violating the rights of
any third party with respect thereto, and no proceedings have been instituted
or, to the best of its knowledge are threatened, and no claim has been received
by NetLive alleging any such violation.
3.11 Litigation, Compliance with Law. Except as set forth on Schedule
3.11, there are no actions, suits, proceedings, or governmental investigations
(or any investigation of any self-regulatory organization) relating to NetLive
or to any of its properties, assets or businesses pending or, to the best of
its knowledge, threatened, or any order, injunction, award or decree
outstanding against NetLive or against or relating to any of its properties,
assets or businesses. Except as set forth in Schedule 3.11, to the best of its
knowledge NetLive is not in violation of any law, regulation, ordinance, order,
injunction, decree, award or other requirements of any governmental body, court
or arbitrator relating to its properties, assets or business which violation
can be reasonably expected to have a material adverse effect on NetLive.
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3.12 Agreements and Obligations; Performance. Except as listed on
Schedule 3.12 (the "Listed Agreements"), NetLive is not a party to, or bound by
any: (i) contract, arrangements, commitment or understanding which involves
aggregate payments or receipts in excess of (U.S.) $25,000 that cannot be
cancelled on thirty (30) days or less notice without penalty or premium or any
continuing obligation or liability; (ii) contractual obligation or contractual
liability of any kind to any NetLive shareholder; (iii) contract, arrangement,
commitment or understanding with its customers or any officer, employee,
shareholder, director, representative or agent thereof for the repurchase of
products, sharing of fees, the rebating of charges to such customers, bribes,
kickbacks from such customers or other similar arrangements; (iv) contract for
the purchase or sale of any materials, products or supplies which contain, or
which commits or will commit it for a fixed term; (v) contract of employment
with any officer or employee not terminable at will without penalty or premium
or any continuing obligation of liability; (vi) deferred compensation, bonus or
incentive plan or agreement not cancelable at will without penalty or premium
or any continuing obligation or liability: (vii) management or consulting
agreement not terminable at will without penalty or premium or any continuing
obligation or liability; (viii) lease for real or personal property (including
borrowings thereon), license or royalty agreement; (ix) union or other
collective bargaining agreement; (x) agreement, commitment or understanding
relating to the indebtedness for borrowed money; (xi) contract involving
aggregate payments or receipts of (U.S.) $10,000 or more which, by its terms,
requires the consent of any party thereto to the consummation of the
transactions contemplated hereby; (xii) contract containing covenants limiting
the freedom of NetLive to engage or compete in any line of business or with any
person in any geographic area; (xiii) contract or opinion relating to the
acquisition or sale of any business; (xiv) voting trust agreement or similar
shareholders' agreement; (xiv) other contract, agreement, commitment or
understanding which materially affects any of its properties, assets or
business, whether directly or indirectly, or which was entered into other than
in the ordinary course of business. Except as set forth on Schedule 3.12,
NetLive has not during the last 36 months entered into any of the types of
contracts, arrangements, commitments or understandings with any of its
suppliers or customers referred to in item (iii) of this Section 3.12. A true
and correct copy of each of the written Listed Agreements, has been delivered
to a representative of the Purchasers. To its knowledge NetLive has in all
material respects performed all obligations required to be performed by it to
date under all of the Listed Agreements, is not in default in any material
respect under any of the Listed Agreements and has received no notice of any
default or alleged default thereunder which has not heretofore been cured or
which notice has not heretofore been withdrawn. Except as set forth on Schedule
3.12, to NetLive's knowledge no material default has occurred under any of the
Listed Agreements by any other party thereto or by any other person, firm or
corporation bound thereunder.
3.13 Inventories. The inventories, if any, of NetLive are accurately
reflected on the NL Financial Statements in all material respects.
3.14 Permits and Licenses. Schedule 3.14 sets forth all permits,
licenses, orders, franchises and approvals from all federal, state, local and
foreign governmental regulatory bodies held by NetLive. NetLive is in
compliance in all material respects with all requirements, standards and
procedures of the federal, state, local and foreign governmental bodies which
issued such permits, licenses, orders,
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franchises and approvals. No vans, automobiles, trucks or other vehicles are
owned or leased by NetLive.
3.15 Interest in Assets. Except as set forth on Schedule 3.15, no
shareholder of NetLive nor any members of his family nor any affiliate of a
shareholder of NetLive, owns any property or rights, tangible or intangible,
including without limitation technology and intellectual property rights, used
in or related, directly or indirectly, to the respective businesses of NetLive.
3.16 Salary Information. Schedule 3.16 contains a list of the names
and current salary rates of and bonus commitments to all present officers of
NetLive, and the names and current annual salary rates of all other persons
currently employed by, or consultant to, NetLive, or who receive compensation
from NetLive.
3.17 Employee Benefit Plans. NetLive does not maintain and is not
required to make contributions to any "pension" and "welfare" benefit plans
(within the respective meanings of Sections 4(2) and 4(1) of the Employee
Retirement Income Security Act of 1974, as amended).
3.18 No Breach. Assuming the shareholders of NetLive shall have
approved the terms of this Agreement and the transactions contemplated hereby,
and assuming NetLive's Certificate of Incorporation shall have been amended in
accordance with the terms hereof, neither the execution and delivery of this
Agreement nor compliance by NetLive with any of the provisions hereof nor the
consummation of the transactions contemplated hereby, will:
(a) violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of NetLive;
(b) violate or, alone or with notice of the passage of time,
result in the material breach or termination of, or otherwise give any
contracting party the right to terminate, or declare a material
default under, the terms of any agreement or other document or
undertaking, oral or written to which NetLive is a party or by which
it or any of its properties or assets may be bound (except for such
violations, conflicts, breaches or defaults as to which required
waivers or consents by other parties have been, or will, prior to the
Closing, be, obtained or which will not have a material adverse effect
on NetLive);
(c) result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of NetLive
pursuant to the terms of any such agreement or instrument;
(d) violate any judgment, order, injunction, decree or award
against, or binding upon, NetLive or upon any of its properties or
assets; or
(e) violate any law or regulation of any jurisdiction
relating to NetLive or any of its securities, assets or properties.
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3.19 Labor Discussions. Except with respect to the agreements listed
in Schedule 3.12, NetLive is not, and during the past three years has not been,
involved in any labor discussions with any unit or group seeking to become the
bargaining unit for any of its employees. With respect to said Agreements,
Schedule 3.19 sets forth a description of the status thereof, including any
demands or proposals with respect to the renewal, extension or replacement
thereof.
3.20 Environmental. As used in this Agreement, the term "Hazardous
Materials" shall mean any waste material which is regulated by any state or
local governmental authority in the states in which NetLive conducts business,
or the United States Government, including, but not limited to, any material or
substance which is (i) defined as "hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous waste" or "restricted hazardous
waste" under any provision of New York law, (ii) petroleum, (iii) asbestos,
(iv) designated as a "hazardous substance" pursuant to Section 311 of the Clean
Water Act, 33 U.S.C. 1251 et seq. (33 U.S.C. 1321) or listed pursuant to
Section 307 of the Clean Water Act (33 U.S.C. 1317), (v) defined as a
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 42 U.S.C. 6901 et seq. (42 U.S.C. 6901), or (vi) defined as a
"hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response,Compensation, and Liability Act, 42 U.S.C. 9601 et seq.
(42 U.S.C. 9601).Except as set forth on Schedule 3.20, the current operations
of NetLive and its current and, to the best of its knowledge its past use
comply and then complied in all material respects with all applicable laws and
governmental regulations including all applicable federal, state and local
laws, ordinances, and regulations pertained to air and water quality. Hazardous
Materials, waste, disposal or other environmental matters, including the Clean
Water Act, the Clean Air Act, the Federal Water Pollution Control Act, the
Solid Waste Disposal Act, the Resource Conservation Recovery Act, and the
statutes, rules and regulations and ordinances or the state, city and country
in which NetLive's property is located.
3.21 Public Reports. Except as set forth on Schedule 3.21, NetLive has
filed in a timely manner with the Commission all reports required to be filed
pursuant to the Act and the Exchange Act. Such reports are accurate and
complete in all material respects and copies of such reports have been made
available to the Purchasers.
3.22 NetLive Securities. The NetLive Securities to be issued under
this Agreement will be duly authorized and reserved for issuance and, when
issued in accordance with this Agreement, will be validly issued and
outstanding, fully paid and non-assessable and vest in the Purchasers free and
clear from any Liens, other than Liens resulting primarily from (i) actions of
the Purchasers, or any of them, and (ii) restrictions on transfer due to
federal and states securities laws, which restrictions are in no way caused, in
whole or in part, by any failure of NetLive to comply with such laws.
3.23 NASDAQ. NetLive's Common Stock and Warrants are listed for
quotation on NASDAQ. Schedule 3.23 includes a list of all correspondence,
NetLive has had with NASDAQ since June 30, 1997, other than notices and other
correspondence sent generally to NASDAQ listed companies.
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3.24 Liquid Assets As of June 19, 1998, NetLive had no less than (i)
(U.S.) $110,000 of cash, and (ii) (U.S.) $200,000 of liquid assets
(collectively the "Liquid Assets"). Schedule 3.24 lists all Liquid Assets, the
amount, the location and the persons who are authorized to withdraw such Liquid
Assets.
3.25 Credit Cards. Except as set forth on Schedule 3.25, no employee,
director or consultant of NetLive has NetLive corporate credit cards or similar
items.
3.26 Shareholders and Similar Agreements. Schedule 3.26 sets forth all
shareholders agreements, voting trusts and similar agreements relating,
directly and/or indirectly, to the voting of NetLive Securities, to which
NetLive is a party or, to NetLive's knowledge by which the securities of
NetLive and/or the holders thereof are bound (the "Voting Agreements").
3.27 Insurance. Schedule 3.27 to be delivered at the Closing, sets
forth a list and brief description of all insurance policies held by NetLive as
of the date of the Closing. Except as set forth in Schedule 3.27, such policies
are in full force and effect and enforceable in accordance with their
respective terms. All premiums for such policies have been paid currently.
3.28 Due Diligence. To the best of NetLive's knowledge all documents
and other materials relating to NetLive or ▇▇▇▇▇ and provided to the
Purchasers, or any of them, in connection with the Transactions are true and
correct in all material respects, other than those materials which were
superseded or corrected by written materials provided to the Purchasers, which
superseding or correcting materials are true and correct in all material
respects.
ARTICLE IV
PRE-CLOSING COVENANTS
Each of the parties hereto hereby covenants and agrees that, from and
after the date hereof, and until the Closing or earlier termination of this
Agreement pursuant to the terms hereof:
4.01 Access. Each shall afford to the officers, attorneys, accountants
and other authorized representatives of the other free and full access, during
regular business hours and upon reasonable notice, to its books, records,
personnel and properties (including, without limitation, the work papers
prepared by its auditors) so that each may have full opportunity to make such
review, examination and investigation as it may desire of their respective
businesses and affairs. Each will cause its employees, accountants and
attorneys to cooperate fully with said review, examination and investigation
and to make full disclosure to the other of all material facts affecting their
respective financial conditions and business operations.
4.02 Conduct of Business. Other than as may be contemplated by the
Agreements, or any of them, ▇▇▇▇▇▇ and NetLive shall each conduct its business
only in the ordinary and usual course and make no material change in any of
their policies, and the Purchasers shall cause ▇▇▇▇▇▇ to conduct the
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business only in the ordinary and historic course and make no material change
in any of its policies without the prior written consent of the other, except
NetLive will take such reasonable action in the winding down of its historic
business.
4.03 Insurance. ▇▇▇▇▇▇ and NetLive shall maintain in force the
insurance policies listed on Schedules 2.07 and 3.27, respectively.
4.04 Liabilities. Neither ▇▇▇▇▇▇ nor NetLive shall incur any
obligation or liability, absolute or contingent, except for those incurred in
the ordinary and usual course of their respective businesses (or in connection
with this transaction and the winding down of NetLive's business); nor shall
they pay any obligation or liability other than: (i) debts, liabilities, and
obligations set forth in their respective Balance Sheets; (ii) debts,
liabilities and obligations arising after the Balance Sheet Date in the
ordinary course of their respective businesses; and (iii)debts, liabilities and
obligations under the contracts, agreements, past practices, arrangements,
relationships, documents and instruments listed,described or contained in this
Agreement or in the Schedules annexed to this Agreement.
4.05 No Breach. Each of the parties hereto will (i) use its best
efforts to assure that all of its representations and warranties contained
herein are true in all material respects (a) at and as of the date hereof,
except to the extent that they speak as of an earlier date or to reflect
changes contemplated herein or in the other Agreements necessary to consummate
the Transactions and (b) to the extent required by Section 6.01 of this
Agreement, at and as of the Closing and no breach shall occur with respect to
any of its covenants, representations or warranties contained herein that has
not been cured by the Closing; (ii) not voluntarily take any action or do
anything which will cause a material breach of or default respecting such
covenants, representations or warranties; and (iii) promptly notify the other
of any event or fact which represents a breach or default.
4.06 No Negotiations. Other than in connection with the consummation
of the Transactions, neither ▇▇▇▇▇, ▇▇▇▇▇▇ nor NetLive, nor any of their
respective officers or directors shall enter into or conduct negotiations, or
enter into any agreement or understanding, for the sale or possible sale of any
of its securities, business, or assets, with anyone other than the other unless
and until this Agreement is terminated in accordance with the terms hereto.
4.07 Shareholder Approval. Each of the parties hereto shall take any
and all actions reasonably required immediately following the execution of this
Agreement to prepare and file with the SEC a proxy statement (the "Proxy
Statement"), to obtain at a NetLive shareholders' meeting the required consent
of NetLive shareholders in accordance with the Act, the Exchange Act and
applicable Delaware law for (i) the Transactions on the terms and conditions
set forth herein; (ii) the Reverse Split of each of the issued and outstanding
shares of Common Stock and options and warrants so that immediately following
such Reverse Split (or on a date certain following such approval), NetLive will
have 1,000,000 shares issued and outstanding, (iii) a name change of NetLive to
"▇▇▇▇▇ Industries, Inc."; (iv) an amendment to the NetLive 1996 Stock Option
Plan (the "Plan") to reserve 1,000,000 shares (on a post-Reverse Stock Split
basis) for issuance upon stock options issued thereunder; and (v) an amendment
to the Certificate of Incorporation of NetLive increasing the authorized Common
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Stock of NetLive to 33,000,000 shares and the blank check preferred stock to
2,000,000; and (vi) such other items as the Purchasers shall reasonably
request. The parties hereto agree that the Proxy Statement shall be in form and
substance satisfactory to the parties and their legal counsel, but in
conformity with Section 14 of the Exchange Act and all other applicable laws,
rules and regulations. Assuming the Purchasers cooperate fully and
expeditiously, NetLive shall (i) within fifteen (15) days after receiving final
approval from the Securities and Exchange Commission regarding the Proxy
Statement, call a shareholders' meeting, and (ii) use its best efforts to
conduct a shareholders' meeting as soon as reasonably practicable thereafter.
4.08 Other Approvals; Resignations. The parties shall use their best
efforts to obtain all approvals, consents and authorizations necessary to
authorize the Transactions on the terms and conditions set forth herein,
including the respective consents of the Board of Directors of each entity.
Except as set forth on Schedule 4.08 or in the Agreements, NetLive shall obtain
all written resignations of its current officers and directors which shall go
into effect simultaneously with the Closing and immediately prior to the
effectiveness of such resignations NetLive shall appoint a new slate of
officers and directors, which persons shall be as designated by the Purchasers
and shall be set forth on Schedule 4.08 hereto.
4.09 Other SEC/NASD/NASDAQ Filings. NetLive shall file with the
Commission, the NASD and NASDAQ all required (or which NetLive believes to be
reasonably advisable) forms and disclosure items in a timely manner, which
forms and disclosure items must be approved by legal counsel to NetLive and the
Purchasers prior to filing or disclosure, required and/or relating to this
Agreement and the Transactions including, but not limited, to disclosure
required by Rule 10b-17 of the Securities Act and "Notice of Listing of
Additional Shares" with NASDAQ.
4.10 NASDAQ. NetLive shall take any and all reasonable actions the
parties hereto mutually agree to maintain the listing of its currently listed
securities on NASDAQ. The Purchasers expressly acknowledge that there is a
substantial risk that NASDAQ will de-list NetLive's securities. Provided
NetLive takes all reasonable actions mutually agreed upon by the parties hereto
as provided above, maintenance of such listing shall not be a condition
precedent to the Purchasers' obligations to complete the Closing hereunder.
4.11 Public Announcements. No party hereunder shall, without the
express written consent of NetLive and Budbox, which consent will not be
unreasonably withheld or delayed, make any announcement or otherwise disclose
any information regarding the Transactions other than as required by law or
otherwise deemed advisable in counsel's opinion to ensure compliance with
public disclosure requirements under the federal securities laws.
4.12 Reasonable Efforts. Upon the terms and subject to the conditions
provided herein, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all actions, and to assist and to
cooperate with the other parties hereto in doing or causing to be done, all
things necessary or advisable to consummate, in the most expeditious manner
practicable, the Transactions contemplated hereby.
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ARTICLE V
CONDITIONS PRECEDENT TO THE OBLIGATIONS
TO NETLIVE TO CLOSE
The obligations of NetLive to enter into and complete the Closing is
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions, any one or more of which may be waived by NetLive (except
when the fulfillment of such condition is a requirement of law).
5.01 Representations and Warranties. All representations and
warranties of the Purchasers contained in this Agreement and in any written
statement (including financial statements), exhibit, certificate, schedule or
other document delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be true and correct in all material respects at the
Closing Date. All such statements, exhibits, schedules and other documents
shall be in form and substance acceptable to NetLive.
5.02 Covenants. The Purchasers shall have performed and complied in
all material respects with all covenants and agreements required by this
Agreement to be performed or complied with by them prior to the Closing.
5.03 No Action. No action, suit, proceeding or investigation shall
have been instituted, and be continuing before a court or before or by a
governmental body or agency, and be unresolved, to restrain or to prevent or to
obtain damages in respect of, the carrying out of the transactions contemplated
hereby, or which might materially and adversely affect the right of NetLive to
consummate the Acquisition or to operate or control the assets, properties and
business of ▇▇▇▇▇ after the Closing Date, or which might have a materially
adverse effect thereon.
5.04 No Material Adverse Change. There shall have been no materially
adverse change at the Closing Date in the business, assets and properties or
financial status of ▇▇▇▇▇▇ since the date hereof.
5.05 Business Financial Statements. The Business Financial Statements
to be delivered to NetLive, shall be prepared in accordance with GAAP,
Regulation S-X, consistent with prior periods and in Australian Dollars and
shall reflect for the year ended June 30, 1997 Net Income of no less than
(U.S.) $1,500,000; provided, however, that notwithstanding anything to the
contrary provided herein or elsewhere, in the event the Net Income for such
period is less than (U.S.) $1,500,000 as set forth above, the parties hereto
shall still effectuate the closing of the Acquisition but the number of shares
of NetLive Common Stock the Purchasers shall receive shall be adjusted downward
so that they receive in the aggregate such number of securities as determined
based upon the following formula:
Actual Net Income at 6/30/97 x 8,000,000
$1,500,000 1
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5.06 Approvals by NetLive. The directors and shareholders of NetLive
shall have approved the terms of this Agreement and the Transactions and the
matters to be voted upon in the Proxy Statement, in accordance with all
applicable laws, rules and regulations.
5.07 Approvals. The Shareholders of ▇▇▇▇▇▇ shall have approved the
terms of this Agreement and the Transactions in accordance with all required
and applicable laws. The Directors of each of the Companies shall have approved
the terms of this Agreement and the Transactions in accordance with all
required and applicable laws.
5.08 Purchaser Lock-Ups. Each of the Purchasers will have entered into
lock-up (collectively, the "Purchaser Lock-Ups") agreements with the
underwriter of NetLive's initial public offering (the "Underwriter"), in form
and substance as each of them and the Underwriter may mutually agree upon.
5.09 Severance Arrangements. Each of ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ will have approved the terms of their respective severance
arrangements, which arrangements shall be deemed approved if they are on terms
no less favorable to ▇▇. ▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇▇▇, respectively,
as those terms set forth on the term sheets (the "Term Sheets") attached hereto
as Exhibit F.
5.10 Due Diligence. Each party understands that (a) the schedules, if
any, which have been delivered pursuant to this Agreement are preliminary and
may be amended or supplemented subsequent to the date of this Agreement as
provided below and have not been reviewed by the other parties, and (b) many of
the exhibits to this Agreement have not been delivered, or, if delivered, have
not been fully negotiated or finalized. Each party may conduct due diligence
with respect to the other parties and deliver amendments or supplements to the
schedules, and otherwise provide information relating to its representations
and warranties set forth in this Agreement, during the period (the "Correction
Period") commencing on the date hereof and ending at the close of business on
July 10, 1998, or such other date as NetLive and Budbox may agree upon. The
schedules, as so amended or supplemented, shall for all purposes be deemed to
be the schedules referred to in this Agreement, and each party's
representations and warranties shall be subject to the disclosure set forth in
the schedules, including any new schedules delivered by such party during the
Correction Period. If (i) the information regarding the Purchasers, or any of
them, which is disclosed during the Correction Period to NetLive (whether on
the schedules or otherwise), reflects a material adverse change in the
business, operations, financial condition or prospects of the Purchasers, or
any of them, from the information previously disclosed, (ii) the results of
such due diligence investigation shall not be reasonably satisfactory to
NetLive, or (iii) the exhibits are not finalized in a manner reasonably
satisfactory to NetLive, then NetLive may terminate this Agreement by written
notice to the Purchasers, which notice shall be given no later than the close
of business on July 10, 1998. In the event of such termination, no party shall
have any obligation or liability to the other parties hereto.
5.11 Closing Documents. NetLive shall have received the documents set
forth in Articles 7.02 hereto in form and substance reasonably satisfactory to
NetLive and its legal counsel.
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5.12 Other Transactions. Each of the other Transactions contemplated
hereby shall be ready to close immediately following the NetLive Purchase, and
shall be on the terms and conditions as set forth herein.
ARTICLE VI
CONDITIONS PRECEDENT TO THE
OBLIGATION OF THE PURCHASERS
The obligation of the Purchasers to enter into and complete the
Closing is subject to the fulfillment, prior to or on the Closing Date, of each
of the following conditions by NetLive, any one or more of which may be waived
by the Purchasers (except when the fulfillment of such condition is a
requirement of law).
6.01 Representations and Warranties. All representations and
warranties of NetLive contained in this Agreement and in any written statement,
schedule or other documents delivered pursuant hereto or in connection with the
transactions contemplated hereby shall be true and correct in all material
respects as of the date hereof, except to the extent that they speak as of an
earlier date or to reflect changes contemplated herein or in the other
Agreements necessary to consummate the Transactions. Any changes in information
set forth in the Schedules hereto shall be set forth on amended schedules which
shall be delivered to the Purchasers at the Closing. Except as set forth in
such amended schedules, all representations and warranties of NetLive contained
in this Agreement and in any written statement, schedule or other documents
delivered pursuant hereto or in connection with the transactions contemplated
hereby shall be true and correct in all material respects as of the Closing
Date.
6.02 Covenants. NetLive shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by it prior to or at the Closing.
6.03 No Actions. No action, suit, proceedings or investigation shall
have been instituted, and be continuing, before a court or before or by a
governmental body or agency, or have been threatened, and be unresolved, by any
governmental body or agency to restrain or prevent, or obtain damages in
respect of, the carrying out of the transactions contemplated hereby.
6.04 Approvals by NetLive. The directors and shareholders of NetLive
shall have approved the terms of this Agreement, the Transactions and the items
set forth in the Proxy Statement, in accordance with all applicable rules and
regulations.
6.05 Reverse Split. NetLive shall have effectuated the Reverse Split
in accordance with applicable law so that immediately prior to the NetLive
Purchase, no more than 1,000,000 shares of Common Stock are issued and
outstanding.
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6.06 NetLive Lock-Ups. Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇ and their respective affiliates who collectively own in the
aggregate 478,175 shares of Common Stock will have entered into lock-up
(collectively, the "NetLive Lock-Ups") agreements with the Underwriter, in form
and substance as each of them and the Underwriter may mutually agree upon.
6.07 Payments Prior to Closing. Attached as Schedule 6.07 hereto is a
list of all persons and other entities to which NetLive anticipates making
payments prior to the Closing. To the extent NetLive (i) makes any payments to
any persons or other entities not set forth on Schedule 6.07, and (ii) such
payments exceed, in the aggregate, (U.S.) $20,000, any such payments in excess
of an aggregate (U.S.) $20,000 and individually in excess of (U.S.) $2,000
shall be subject to the prior written approval of Budbox.
At the Closing, NetLive shall provide written evidence, including bank
statements, that, except as set forth in Schedule 6.07, since March 11, 1998,
no funds were paid directly and/or indirectly to any of its shareholders,
consultants, officers, directors or their respective affiliates not in the
ordinary course of business, or as contemplated hereby, except for any payments
made in settlement of outstanding agreements on terms agreed to in writing by
Mr. Player and NetLive in the exercise of their reasonable discretion.
6.08 Resignations; Appointments of New Officers and Directors. Except
as set forth on Schedule 6.08, all current officers and directors of NetLive
shall have provided their written resignations effective as of the Closing and
immediately prior to or concurrently with the effectiveness of such
resignations a new board of directors and officers of NetLive as designated by
the Purchasers, shall have been appointed.
6.09 Liabilities, Etc. Except as set forth on Schedule 6.09, there
shall be no direct or indirect liabilities, indebtedness or other financial or
similar obligations, contingent or otherwise, exceeding an aggregate of Five
Thousand (AUD $5000) Australian Dollars of NetLive outstanding.
6.10 Termination of Agreements, Etc. Except as set forth on Schedule
6.10, all Voting Agreements known to NetLive shall be terminated in writing
and, except as contemplated by Section 7.02(g) hereof, no general or other
release shall have been given, directly or indirectly, to any officer,
director, employee, consultant, shareholder of NetLive, or their respective
affiliates,with respect to any obligations or other liabilities in any way
relating to this Agreement, on or prior to the Closing Date.
6.11 Termination of Options, Warrants, Etc. The Purchasers shall have
received evidence reasonably satisfactory to the Purchasers that all options,
warrants and similar rights to be canceled pursuant to Section 1.13 hereof have
been canceled.
6.12 Other Transactions. The other Transactions contemplated hereby
shall be ready to close immediately following the Closing, and shall be on the
terms and conditions as set forth herein and therein, and any failure to do so
does not result solely from factors within the control of the Purchasers,
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or any of them, including their failure to use, or delay in using, their best
efforts to effect the Transactions contemplated hereby.
6.13 Underwriter's Release. The Underwriter shall have provided
NetLive with a release of the terms of the underwriting agreement relating to
NetLive's 1996 IPO.
6.14 Imagine Holding Corp. NetLive shall have (i) issued 150,000
shares of Common Stock to Imagine or its designee pursuant to the terms of the
Imagine Consulting Agreement, and (ii) sold 300,000 shares of Common Stock to
Imagine at a price of (U.S.) $.50 per share pursuant to an exemption from
registration under the Act.
6.15 Intercorp Services Agreement. The Player Companies shall have
delivered to Intercorp, pursuant to the terms of the service agreement among
The Player Companies, Intercorp and Mr. Player dated June 17, 1998, attached
hereto as Exhibit G (the "Intercorp Services Agreement"), Common Stock
certificates representing the Intercorp Shares, accompanied by all instruments
and documents, executed in blank, as shall be necessary to effectuate the
transfer of the Intercorp Shares to Intercorp, free and clear of all manner of
Liens, other than Liens resulting primarily from (i) actions of Intercorp, and
(ii) restrictions on transfer due to federal or state securities laws, which
restrictions are in no way caused, in whole or in part, by any failure of
Intercorp to comply with such laws; such Intercorp Shares and accompanying
instruments of transfer to be held in escrow until transfer is authorized
pursuant to the terms of the Intercorp Services Agreement.
6.16 Due Diligence. Each party understands that (a) the schedules, if
any, which have been delivered pursuant to this Agreement are preliminary and
may be amended or supplemented subsequent to the date of this Agreement as
provided below and have not been reviewed by the other parties, and (b) many of
the exhibits to this Agreement have not been delivered, or, if delivered, have
not been fully negotiated or finalized. Each party may conduct due diligence
with respect to the other parties and deliver amendments or supplements to the
schedules, and otherwise provide information relating to its representations
and warranties set forth in this Agreement, during the Correction Period. The
schedules, as so amended or supplemented, shall for all purposes be deemed to
be the schedules referred to in this Agreement, and each party's
representations and warranties shall be subject to the disclosure set forth in
the schedules,including any new schedules delivered by such party during the
Correction Period. If (i) the information regarding NetLive which is disclosed
during the Correction Period to the Purchasers, or any of them, (whether on the
schedulesor otherwise), reflects a material adverse change in the business,
operations,financial condition or prospects of NetLive from the information
previously disclosed, (ii) the results of such due diligence investigation
shall not be reasonably satisfactory to the Purchasers, or any of them, or
(iii) the exhibits are not finalized in a manner reasonably satisfactory to the
Purchasers, or any of them, then the Purchasers, or any of them, may terminate
this Agreement by written notice to NetLive, which notice shall be given no
later than the close of business on July 10, 1998. In the event of such
termination, no party shall have any obligation or liability to the other
parties hereto.
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6.17 Closing Documents. The Purchasers shall receive all of the
documents set forth in Sections 7.03 of this Agreement, which documents shall
be in form and substance reasonably satisfactory to the Purchasers and their
legal counsel.
ARTICLE VII
CLOSING
7.01 Location. The closing of the Transactions (the "Closing")
provided for herein shall take place at the office of Gusrae, ▇▇▇▇▇▇ & Bruno,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. o'clock
within three (3) business days following the satisfaction of all conditions
precedent set forth in Article V and Article VI of this Agreement or at such
other time and place as may be mutually agreed to by the parties hereto. Such
date is referred to in this Agreement as the "Closing Date."
7.02 Items to be Delivered by the Purchasers. At the Closing, the
Purchasers will deliver or cause to be delivered to NetLive:
(a) AUD $10,000,000, in immediately available funds,
representing the purchase price of the NetLive Securities in the
NetLive Purchase;
(b) Secretary's Certificate of ▇▇▇▇▇▇, certifying as to (i)
the corporate authorization of the Transactions (as they relate to
▇▇▇▇▇▇); (ii) the organizational documents of ▇▇▇▇▇▇ (Certificate of
Incorporation and By-Laws, or their equivalents), (iii) the incumbency
of any and all ▇▇▇▇▇▇ signatories in the Transactions; and (iv) the
closing documents executed in connection with the closing of the
NetLive Purchase.
(c) Officers certificate of ▇▇▇▇▇▇ (in a representative
capacity only);
(d) Good standing certificate of ▇▇▇▇▇▇ or equivalent;
(e) All schedules required by this Agreement, including
amendments thereto;
(f) Such evidence of the satisfaction of the conditions
contained in Section 6.11 hereof as shall be mutually agreed upon by
the parties hereto;
(g) General written releases (other than as may be prohibited
under federal or state law) from NetLive in favor of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇,
respectively;
(h) The Purchaser Lock-Ups
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(h) Such other resolutions, documents and certificates as are
reasonably requested by NetLive.
7.03 Items to be Delivered by NetLive. At the Closing, NetLive will
deliver or cause to be delivered to the Purchasers:
(a) NetLive Common Stock certificates in the name of the
Purchasers as set forth in Schedule 1.01 hereto, accompanied by all
instruments and documents as in the opinion of counsel to the
Purchasers shall be necessary to effectuate the transfer of the
NetLive Securities to the Purchasers, free and clear of all manner of
Liens, other than Liens resulting primarily from (i) actions of the
Purchasers, or any of them, and (ii) restrictions on transfer due to
federal or state securities laws, which restrictions are in no way
caused, in whole or in part, by any failure of NetLive to comply with
such laws;
(b) NetLive Preferred Stock certificates in the name of the
Purchasers as set forth in Schedule 1.01 hereto, accompanied by all
instruments and documents as in the opinion of counsel to the
Purchasers shall be necessary to effectuate the transfer of the
NetLive Securities to the Purchasers, free and clear of all manner of
liens, pledges, encumbrances, changes and claims thereon;
(c) Immediately subsequent to the Closing, NetLive shall
deliver stock certificates in the name of NetLive representing all of
the 1,666,667 ▇▇▇▇▇ Shares in accordance with Section 1.06 hereof,
accompanied by all instruments and documents as in the reasonable
opinion of NetLive's counsel shall be necessary to effect the
allotment of the ▇▇▇▇▇ Shares to NetLive, free and clear of all manner
of Liens, other than Liens resulting primarily from (i) actions of the
Purchasers, or any of them, and (ii) restrictions on transfer due to
federal or state securities laws, which restrictions are in no way
caused, in whole or in part, by any failure of NetLive to comply with
such laws;
(d) the NetLive Lock-Ups;
(e) Secretary's Certificate of NetLive, certifying as to,
among other items (i) the corporate authorization of the Transactions;
(ii) the organizational documents of NetLive; (iii) the incumbency of
any and all NetLive signatories in the Transactions; and (iv) the
closing documents executed in connection with the closing of the ▇▇▇▇▇
Purchase.
(f) Officers certificates (in a representative capacity
only);
(g) The original minute book, tax returns and all other
original records of NetLive, including, without limitation, all
records of NetLive, other than attorney work product and similar
privileged information, held by Esanu Katsky ▇▇▇▇▇▇ & Siger, LLP will
be delivered to the Purchasers at or before the Closing Date;
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(h) Good standing certificate;
(i) Except as set forth on Schedule 4.08, resignations of
current officers and directors and appointment of new officers and
directors;
(j) A resolution by the sole Director of ▇▇▇▇▇ approving (x)
the allotment to NetLive, in accordance with Section 7.02(b) hereof;
and (y) the appointment of the Directors of ▇▇▇▇▇ set forth on
Schedule 6.08 hereto.
(k) Such documents as are required to give the Purchasers, as
officers of NetLive sole and exclusive control over all of NetLive's
Liquid Assets (i.e., exclusive check writing and withdrawal power of
NetLive's bank accounts and other Liquid Assets);
(l) General written releases in favor of NetLive from all
employees, officers and directors who were engaged by NetLive at any
time from and after June 1, 1997, other than those persons set forth
on Schedule 7.03;
(m) Secretary's certificate certifying approval by the
shareholders of NetLive of the applicable Transactions and other
required matters at a shareholders meeting;
(n) Certificate from the Secretary of State of the State of
Delaware certifying (i) the name change of NetLive to ▇▇▇▇▇
Industries, Inc.; and (ii) filing of the Certificate of Designation
for the NetLive Preferred Stock;
(o) A record reasonably satisfactory to the Purchasers and
supported by documentation, of the use of the NetLive funds from the
date hereof through Closing; and
(p) Such evidence of the satisfaction of the conditions
contained in Section 5.09 hereof as shall be mutually agreed upon by
the parties hereto.
(q) Such other resolutions, documents and certificates as are
reasonably required by the Purchasers and their legal counsel.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.01 Survival. The parties hereto agree that their respective
representations and warranties contained in this Agreement or delivered on
their behalf pursuant hereto shall terminate at the Closing.
8.02 Indemnification. Each of the Purchasers, severally and not
jointly agrees to save, defend and indemnify NetLive and its officers,
directors and stockholders against and hold them harmless from any and all
liabilities, of every kind, nature and description, fixed or contingent
(including, without
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limitation, legal counsel fees and expenses in connection with any action,
claim or proceeding relating to such liabilities) (collectively, "Damages")
arising out of or by reason of any breach of any representation or warranty of
such Purchaser contained in Article 1 of this Agreement. Budbox agrees to save,
defend and indemnify NetLive and its officers, directors and stockholders
against and hold them harmless from any and all Damages arising out of or by
reason of any breach of any representation or warranty of Budbox contained in
this Agreement. NetLive agrees to save, defend and indemnify the Purchasers and
their respective officers, directors and stockholders, if applicable, and hold
them harmless from any and all Damages, resulting or arising from or otherwise
relating to any failure by NetLive to perform or otherwise fulfill or comply
with any undertaking, agreement or obligation of NetLive hereunder or by reason
of any breach of any representation or warranty of NetLive contained herein.
The party providing indemnification under either of the two previous sentences
is referred to as the "Indemnifying Party" and the party receiving the benefit
of indemnification is referred to as the "Indemnified Party."
8.03 Defense of Claims. The Indemnified Party agrees to notify the
Indemnifying Party with reasonable promptness of any claim asserted against it
in respect of which the Indemnifying Party may be liable under this Agreement,
which notification shall be accompanied by a written statement setting forth
the basis of such claim and the manner of calculation thereof. The Indemnifying
Party shall have the right to defend any such claim at its own expense and with
counsel of its choice; provided, however, that such counsel shall have been
approved by the Indemnified Party prior to engagement, which approval shall not
be unreasonably withheld or delayed; and provided further, that the Indemnified
Party may participate in such defense, if it so chooses, with its own counsel
and at its own expense.
8.04 Directors' and Officers' Insurance. The Purchasers shall use
their best efforts to cause NetLive to cause ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Former Directors
and Officers") to be covered for a period of four (4) years from the Closing
Date by the directors' and officers' liability insurance ("D&O Insurance")
policy maintained by NetLive with respect to acts or omissions occurring at or
prior to the Closing which were committed by persons in their capacity as
officers and or directors; provided that (i) NetLive may substitute therefor
policies of at least the same coverage and amounts containing terms and
conditions which are not less advantageous than such policy; (ii) in no event
shall NetLive be required to expend more than 200% of the current amount
expended by NetLive for such insurance (which shall not diminish NetLive's
obligation to expend up to such amount if required in order to maintain such
D&O Insurance on such terms and in such amounts), and (iii) in no event shall
NetLive be required to continue such coverage in the event NetLive no longer
covers its directors and officers with such D&O Insurance for any reason,
including, without limitation, the dissolution of NetLive. In the event that,
in order to maintain D&O Insurance for the Former Directors and Officers and
for NetLive's then current directors and officers, NetLive is required to
either (a) expend more than 200% of the current amount expended by NetLive for
such insurance or (b) maintain D&O Insurance coverage on less favorable terms,
to the extent NetLive shall choose to maintain D&O Insurance coverage on less
favorable terms, the Former Directors and Officers shall be covered by D&O
Insurance on no less favorable terms than the then current directors and
officers. The provisions of this Section 8.04, which shall survive the Closing
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hereunder, are intended to be for the benefit of, and shall be enforceable by,
each of the Former Directors and Officers and their respective heirs and
representatives.
ARTICLE IX
TERMINATION AND WAIVER
9.01 Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the transactions provided
for herein abandoned at any time prior to the Closing Date:
(a) By mutual consent of NetLive and the Purchasers;
(b) By NetLive if (i) any of the conditions set forth in
Article 5 hereof shall not have been fulfilled on or prior to the date
twenty (20) days following the date of the NetLive shareholders
approval of the Transactions at a shareholders meeting pursuant to the
Proxy Statement, or shall become incapable of fulfillment at any time,
and shall not have been waived; (ii) the Business Financial Statements
are not delivered to NetLive on or prior to June 30, 1998; or (iii)
the Purchasers fail to obtain such third party consents as may be
required to consummate the Transactions, on or prior to the date
twenty (20) days following the date of the NetLive shareholders
approval of the Transactions at a shareholders meeting pursuant to the
Proxy Statement;
(c) The Purchasers if any of the conditions set forth in
Article 6 hereof shall not have been fulfilled on or prior to the date
twenty (20) days following the date of the NetLive shareholders
approval of the Transactions at a shareholders meeting pursuant to the
Proxy Statement, or shall have become incapable of fulfillment at any
time, and shall not have been waived; and
(d) By NetLive and vice versa by the Purchasers, if (i) any
material legal action or proceeding shall have been instituted or
threatened seeking to restrain, prohibit, invalidate or otherwise
affect the consummation of the transactions contemplated by this
Agreement which makes it inadvisable, in the judgment of the other, to
consummate same; provided, however, that the right to terminate this
Agreement under this Section shall not be available to any party whose
failure to fulfill any obligation under this Agreement was the cause
of, or resulted in, the failure to consummate the transactions
contemplated hereby to such date; (ii) in any event, the Closing has
not occurred on or prior to September 15, 1998; (iii) in any event,
▇▇▇▇▇ has not received a commitment from its bank for the Loan on or
prior to July 31, 1998; or (iv) if the other Agreements are not duly
executed on or before July 15, 1998;
(e) By any party hereto, provided that the terminating party
is not then in material breach of any representation, warranty or
covenant hereof which is not cured within fifteen (15) business
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days following written notice of such breach, or which breach cannot
by its nature or timing be cured before the Closing.
In the event that this Agreement is terminated as described above,
this Agreement shall be void and of no force and effect, without any liability
or obligation on the part of any of the parties hereto except for any liability
which may arise pursuant to Section 8.02. Any such termination shall be without
prejudice to the rights of any party arising out of the wilful breach by any
other party of any provision of this Agreement.
9.02 Waiver. Any condition to the performance of any party hereto
which legally may be waived on or prior to the Closing Date may be waived at
any time by the party entitled to the benefit thereof by action taken or
authorized by an instrument in writing executed by the relevant party or
parties. The failure of any party at any time or times to require performance
of any provision hereof shall in no manner affect the right of such party at a
later time to enforce the same. No waiver by any party of the breach of any
term, covenant, representation or warranty contained in this Agreement as a
condition to such party's obligations hereunder shall release or affect any
liability resulting from such breach, and no waiver of any nature, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such condition or of any
breach of any other term, covenants, representation or warranty of this
Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.01 Expenses. Each of the parties hereto shall bear its own expenses
in connection herewith.
10.02 Confidential Information. Each party agrees that such party and
its representatives will hold in strict confidence all information and
documents received from the other parties and, if the transactions herein
contemplated shall not be consummated, each party will continue to hold such
information and documents in strict confidence and will return to such other
party all such documents (including the documents annexed to this Agreement)
then in such receiving party's possession without retaining copies thereof:
provided, however, that each party's obligations under this Section 10.02 to
maintain such confidentiality shall not apply to any information or documents
that are in the public domain at the time furnished by the others or that
become in the public domain thereafter through any means other than as a result
of any act of the receiving party or of its agents, officers, directors or
shareholders which constitutes a breach of this Agreement, or that are required
by applicable law to be disclosed (including, without limitation, any and all
disclosure requirements under Section 14 of the Exchange Act and any and all
other requirements under the federal securities laws).
10.03 Modification, Termination or Waiver. This Agreement may be
amended, modified, superseded or terminated, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, but only by a
written instrument executed by the party waiving compliance. The
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failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right of such party at a later
time to enforce the same.
10.04 Notices. Any notice or other communication required or which may
be given hereunder shall be in writing and either be delivered personally or by
reputable overnight delivery service, or be mailed, certified or registered
mail, postage prepaid, as follows:
If to the Purchasers to:
The addresses set forth on Schedule 1.01
With a copy to:
Gusrae, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to NetLive to:
NetLive Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
With a copy to:
Esanu, Katsky, ▇▇▇▇▇▇ & Siger, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
The parties may change the persons and addresses to which the notices
or other communications are to be sent to it by giving written notice of any
such change in the manner provided herein for giving notice.
10.06 Binding Effect and Assignment. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the parties
hereto; provided, however, that no assignment of any rights or delegation of
any obligations provided for herein may be made by any party without the
express consent of the other parties, and except that NetLive may assign this
Agreement to an affiliate of NetLive.
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10.07 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof.
10.08 Schedules and Exhibits. All Schedules and Exhibits annexed
hereto and the documents and instruments referred to herein or required to be
delivered simultaneously herewith or at the Closing are expressly made a part
of this Agreement as fully as though completely set forth herein, and all
references to this Agreement herein or in any of such Schedules, documents or
instruments shall be deemed to refer to and include all such Schedules,
documents and instruments.
10.09 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and to be performed entirely within that state, excluding the choice of
law rules thereof. All parties hereto irrevocably (i) consent to the
jurisdiction of the federal courts of the County and State of New York for any
action relating to this Agreement and agree not to raise the defense of forum
non conveniens, and (ii) agree that service may be effected thereon by courier
or certified mail, return receipt requested, at the respective addresses set
forth herein.
10.10 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but which together shall
constitute one and the same instrument.
10.11 Section Headings. The section headings contained in this
Agreement are inserted for convenience of reference only and shall not affect
the meaning or interpretation of this Agreement.
10.12 Currency Conversion Ratio. Whenever any currency conversion is
required hereunder it shall be calculated at the exchange rate of (AUD) $1.00
to (U.S.) $0.70.
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WITNESS the execution of this Agreement as of the date first above
written.
NETLIVE COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
BUDBOX PTY LIMITED
By: /s/ ▇▇▇▇▇▇▇▇ Player
-------------------------------
Name: ▇▇▇▇▇▇▇▇ Player
Title: Director
/s/ ▇▇▇▇▇▇▇▇ Player
-------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLAYER
/s/▇▇▇▇▇ Player
-------------------------------
▇▇▇▇▇ ▇▇▇▇ PLAYER
▇▇▇▇▇ INDUSTRIES PTY LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
▇▇▇▇▇▇ ▇▇▇▇▇ PTY LIMITED
By: /s/▇▇▇▇▇▇▇▇ Player
-------------------------------
Name: ▇▇▇▇▇▇▇▇ Player
Title: Director
PLAYBYRNE INVESTMENTS PTY LIMITED
By: /s/▇▇▇▇▇▇▇▇ Player
-------------------------------
Name: ▇▇▇▇▇▇▇▇ Player
Title: Director
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INTERCORP GROUP PTY LIMITED
By: /s/ Liberty ▇▇▇▇▇
----------------------------------
Name: Liberty ▇▇▇▇▇
Title: Director
HALLENDON PTY LIMITED
By: /s/Liberty ▇▇▇▇▇
----------------------------------
Name: Liberty ▇▇▇▇▇
Title: Director
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LIST OF SCHEDULES TO THE AGREEMENT
0.01 Brand Names
1.01 Purchasers and Assignees
2.04 Consents
2.07 Insurance
2.08 Litigation, Compliance with Law
2.09 Real Property
2.11 Permits and Licenses
2.12 Breaches
3.01 Corporate Existence; Foreign Qualifications
3.02 Capitalization
3.03 Subsidiaries
3.04 Consents
3.07 Liabilities
3.08 Action Since Balance Sheet Date
3.09 Adverse Developments
3.10 Ownership of Assets
3.11 Litigation, Compliance with Law
3.12 Agreements and Obligations; Performance
3.14 Permits and Licenses
3.15 Interest in Assets
3.16 Salary Information
3.19 Labor Discussions
3.20 Environmental
3.21 Public Reports
3.23 NASDAQ
3.24 Liquid Assets
3.25 Credit Cards
3.26 Shareholders and Similar Agreements
3.27 Insurance
4.08 Other Approvals; Resignations
5.08 Purchaser Lock-Ups
6.06 NetLive Lock-Ups
6.07 Payments Prior to Closing
6.08 Resignations; Appointments of New Officers and Directors
6.09 Liabilities, Etc.
6.10 Termination of Agreements, Etc.
7.03 No Releases
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LIST OF EXHIBITS
----------------
A Form of Note
B Form of Trademark Assignments
C Form of Licenses
D Form of Certificate of Designation
E Form of ▇▇▇▇▇ Sale of Business Agreement, including
promissory note
F Severance Term Sheet
G Form of Intercorp Services Agreement
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Schedule 1.01 - The Purchasers and Assignees Purchasers
-------------------------------------------------------
NO. OF SHARES (COMMON AND
NAMES PREFERRED TO BE RECEIVED)
----- -------------------------
i. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Player 500,000 shares of Common Stock
0 shares of Preferred Stock
ii. ▇▇▇▇▇ ▇▇▇▇ Player 250,000 shares of Common Stock
0 shares of Preferred Stock
3. Playbyrne Investments Pty Limited 3,000,000 shares of Common Stock
1,000,000 shares of Preferred Stock
4. Budbox Pty Limited 2,600,000 shares of Common Stock
0 shares of Preferred Stock
5. ▇▇▇▇▇▇ ▇▇▇▇▇ Pty Limited 1,385,000 shares of Common Stock
0 shares of Preferred Stock
6. Intercorp Group Pty Limited 200,000 shares of Common Stock
0 shares of Preferred Stock
7. Hallendon Pty Limited 65,000 shares of Common Stock
0 shares of Preferred Stock
Assignees
----------
8. Gusrae ▇▇▇▇▇▇ & Bruno 100,000 shares of Common Stock
0 shares of Preferred Stock
9. Intercorp Group Holdings Pty Limited 500,000 shares of Common Stock*
0 shares of Preferred Stock
10. Keeldon Industries Ltd. 50,000 shares of Common Stock
0 shares of Preferred Stock
11. Magic Consulting Group, Inc. 200,000 shares of Common Stock
* 200,000 shares of Common Stock to be transferred from one or more of the
Player Companies immediately following the Closing, and 300,000 shares of
Common Stock to be held in escrow and transferred from one or more of the
Player Companies no later than two years after the Closing Date pursuant to the
terms of the Intercorp Services Agreement.
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Purchaser Notice Addresses:
---------------------------
For The Player Companies, ▇▇▇▇▇▇▇▇ Player and ▇▇▇▇▇ Player:
▇▇-▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
For Intercorp and Hallendon:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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