ASSET PURCHASE AGREEMENT DATED AS OF AUGUST 1, 2008 BY AND BETWEEN ITEX CORPORATION AND THE INTAGIO GROUP, INC.
DATED
AS OF AUGUST 1, 2008
BY
AND BETWEEN
ITEX
CORPORATION
AND
THE
INTAGIO GROUP, INC.
THIS
ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of August 1, 2008, is by
and between ITEX Corporation, a Nevada corporation (“ITEX”), and The Intagio
Group, Inc., a Delaware corporation (“Intagio”).
WHEREAS,
ITEX wishes to purchase from Intagio, and Intagio wishes to sell to ITEX,
specified assets of Intagio relating to Intagio’s barter exchange and related
media planning and placement business, all on the terms and subject to the
conditions set forth in this Agreement;
WHEREAS,
the Board of Directors of Intagio has adopted and approved this Agreement and
the sale of assets as described herein;
WHEREAS,
the Board of Directors of ITEX has adopted and approved this Agreement and
the
purchase of assets as described herein; and
WHEREAS,
the parties desire to enter into this Agreement to set forth their mutual
agreements concerning the above matter;
NOW,
THEREFORE, in consideration of the foregoing premises and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, the parties hereby agrees as follows:
ARTICLE
1
SALE
AND TRANSFER OF ASSETS; CLOSING
1.1. Sale
of Assets.
At the
closing of the transactions contemplated hereby (the “Closing”), and upon the
terms and subject to the conditions of this Agreement, Intagio shall sell,
convey, transfer, assign and deliver to ITEX, and
ITEX
will purchase and acquire from Intagio, all right, title and interest of Intagio
in and to
the
following assets (the “Purchased Assets”):
(a) The
clients (the “Assigned Clients”) listed on Exhibit
A hereto,
(b) All
contracts, insertion orders, and media purchase agreements (the “Assigned
Contracts”) between Intagio and the Assigned Clients, including the Intagio
contractual rights and client relationships arising from such Assigned Contracts
(excluding those related
to Intagio’s “Perfect Escapes” business);
(c) All
trade
balances in effect as of the Closing, both deficit and credit, associated with
the Assigned Contracts (which balances shall be transferred into the ITEX
trading system at the Closing);
(d) Historical
transactional data from the Assigned Contracts and associated
accounts;
(e) Copies
of
the Assigned Contracts, if and only to the extent to which Intagio is in
physical possession of, and is able to locate copies of, such Assigned
Contracts; and
(f) All
Cash
Receivables (defined in Section 1.10) as of the Closing Date that arose from
the
Assigned Contracts and associated accounts.
(g) All
contractual rights of Intagio to the Advertising Credits listed on Exhibit
B
hereto;
The
parties agree to the transfer and conveyance of the Purchased Assets in
intangible form as
follows: Immediately
following execution of this Agreement by all parties, Intagio shall transfer
to
ITEX, by electronic File Transfer Protocol (FTP) or other reasonable means,
account information for the Assigned Accounts through July 31, 2008. Immediately
following Closing, Intagio shall transfer to ITEX, by overnight delivery service
or other reasonable means, account information for the Assigned Accounts through
month-end on July 31, 2008, along with transaction history and related
information associated with previously closed commercial accounts for which
there are transaction records within the Intagio Trading Network.
The
Purchased Assets shall be transferred or otherwise conveyed to ITEX free and
clear of all liabilities, obligations, liens, security interests,
encumbrances and restrictions,
excepting only the Assumed Liabilities in Section 1.3, the Assumed Office Lease
in Section 1.5, and the Cash Media Liabilities in Section 1.11.
1.2. Excluded
Assets.
Notwithstanding anything to the contrary contained in this Agreement, no assets
of Intagio other than the assets specifically set forth in Section 1.1 shall
be
part of the sale and purchase contemplated hereunder. By way of example and
without limiting the generality of the foregoing, ITEX shall not acquire any
rights whatsoever in or to any of the following assets, which assets are
specifically excluded from the Purchased Assets and shall therefore remain
the
sole and exclusive property of Intagio following the Closing:
(a) Any
and
all software or database programs owned, licensed or operated by Intagio,
including but not limited to the TradeIt! software program and all of its
components;
(b) Any
and
all account management software owned, licensed or operated by Intagio, and
all
software related to the operation of the ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ website;
and
(c) Any
and
all assets or documents related to Intagio’s “Perfect Escapes”
business.
1.3. Assumption
of Liabilities by ITEX.
Subject
to the terms and conditions set forth in this Agreement, upon
the
Closing, ITEX shall assume and become liable for the following liabilities,
obligations and commitments (the “Assumed Liabilities”):
(a) (i)
Any
and all liabilities
arising out of any of the Assigned Contracts, including but not limited to
any
and all trade transaction liabilities associated with the Assigned Clients
(such
as, for example, post-Closing transaction reversals made in the regular course
of business);
(ii)
All
cash credits that are due members and that have a negative cash balance that
were accrued in the regular course within the Intagio Trading Network and that
arose from the Assigned Contracts and relationships in existence prior to the
Closing;
2
provided
however,
that the
aggregate amount of 1) liabilities other than Cash Media Liabilities, and 2)
negative cash balances, assumed by ITEX under this Section 1.3(a) shall not
exceed
$15,000; and
(b) All
Cash
Media Liabilities (defined in Section 1.11).
1.4. Excluded
Liabilities.
Other
than the Assumed Liabilities described in Section 1.3 (and subject to the
limitations set forth in the proviso to Section 1.3(b)), the Assumed Office
Lease in Section 1.5, and the Cash Media Liabilities in Section 1.11, ITEX
shall
assume no liabilities of Intagio of any kind under this Agreement. For purposes
of this section, “liability” shall be defined as any liability or obligation of
any Person of any kind, character or description, whether known or unknown,
absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated
or unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise and whether
or not the same is required to be accrued on the financial statements of any
such Person.
Nothing
in this Agreement shall alter the parties’ reciprocal trading account
relationship or the balance of the parties’ reciprocal trading
account(s).
1.5. Assumption
of Office Lease, etc.
As soon
as practicable following the Closing Date, subject to the terms of the First
Amended Office Service Agreement attached hereto as Exhibit
G,
ITEX
shall assume Intagio’s leasehold for office space located at One Oakbrook
Terrace, Suite 718, Oakbrook Terrace, Illinois, 60181 (the “Illinois Office
Space”). The parties shall negotiate in good faith the terms of assignment of
the existing lease and/or establishment of a new sublease, with the intention
of
executing such assignment and/or sublease on or before August 31, 2008 (subject
to any additional time necessary in order for Intagio to obtain any required
landlord consents) (it being acknowledged by ITEX that Intagio is making no
representations or warranties as to its ability to obtain any such consents
and
that Intagio shall have no obligation to make any payments in order to obtain
any such consents). Effective August 1, 2008, the parties hereby amend their
Office Services Agreement dated August 17, 2007(the “Old Office Services
Agreement”) to be replaced at Closing by the First Amended Office Service
Agreement attached hereto as Exhibit
G.
The
First Amended Office Services Agreement (Exhibit
G)
shall
control the parties’ joint use and occupancy of the Illinois Office space
beginning August 1, 2008, and extending until terminated pursuant to its
terms.
If
landlord consent is not obtained, Intagio shall continue to pay all office
rent
for the Illinois Office Space through the end of Intagio’s leasehold, provided
that ITEX makes timely payments to Intagio pursuant to the terms of the First
Amended Office Service Agreement.
1.6. Purchase
Price.
ITEX
shall pay to Intagio the following consideration (the “Purchase Price”) for the
Purchased Assets:
(a) Two
Hundred Eighteen Thousand Four Hundred Twenty One and One Cent ($218,421.01),
to
be paid by ITEX to Intagio at the Closing in the form of a certified bank check
or by wire transfer; plus
(b) A
Subordinated Promissory Note in the form attached hereto as Exhibit
D,
in the
principal sum of
Six
Hundred Eighty Seven Thousand Five Hundred United States Dollars
($687,500).
3
1.7. Allocation
of Purchase Price.
[Omitted].
1.8. Settlement
of Earnout Payment Obligation.
(a) 2005
Agreement Not Modified or Amended.
The
earnout provisions set forth in the Agreement and Plan of Merger, dated as
of
June 30, 2005, by and among ITEX, BXI Exchange, Inc., BXI Acquisition Sub,
Inc.
and Intagio (the “2005 Agreement”) are not modified, amended or changed by this
Agreement and shall remain in full force and effect in accordance with the
terms
thereof.
(b) Acceleration
of 2007 Earnout Payment
Obligation. Pursuant to the Agreement and Plan of Merger, dated as of July
25,
2007, by and among ITEX and Intagio (the “2007 Agreement”), ITEX is obligated to
hereafter make earnout payments to Intagio. As a material component of the
consideration for this Agreement, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Dollars ($150,000) of the cash payment at Closing set forth in Section 1.6(a)
shall be deemed to be in full satisfaction of ITEX’s earnout payment obligation
to Intagio arising from the 2007 Agreement. Except for settlement of ITEX’s
earnout payment obligation under the 2007 Agreement, all other provisions of
the
2007 Agreement shall remain in force and effect in accordance with the terms
thereof.
(c) Adjustment
of Security Deposit. As
a
material component of the consideration for this Agreement, Sixteen Thousand
Nine Hundred Fifty Three US Dollars and 33 Cents ($16,953.33) of the cash
payment at Closing set forth in Section 1.6 shall be deemed to be reimbursement
to Intagio of the amount previously paid by Intagio to the landlord of the
office space described in Section 1.5. Whether or not the landlord consents
to
the assignment of the lease for the Illinois Office Space, the $16,953.33
security deposit held by the landlord shall thereafter be for the benefit of
ITEX’s ongoing tenancy of the office space and any subsequent reimbursement of
the security deposit by the landlord shall be the property of ITEX. The parties
shall enter into a First Amended Office Service Agreement at Closing, with
terms
substantially similar to those set forth in Exhibit
G.
1.9. Closing.
The
Closing will take place on Friday, August 1, 2008 at the offices of TroyGould
P.C., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, unless another
time, date or place is agreed to in writing by ITEX and Intagio (the date on
which the Closing occurs being referred to as the “Closing Date”). All actions
taken at the Closing shall be deemed to have been taken simultaneously at the
time the last of any such actions is taken or completed. Failure to consummate
the purchase and sale provided for in this Agreement on the date and time and
at
the place determined pursuant to this Section 1.9 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
1.10. Cash
Receivables and Cash Credits.
(a) “Cash
Receivables” shall mean the sum of all cash amounts that clients owe to Intagio,
arising from the Assigned Contracts, in the form of receivables arising from
the
Assigned Contracts as listed on Exhibit
A
hereto.
4
(b) “Cash
Credits” shall mean the sum of all cash amounts that Intagio owes to clients,
arising from the Assigned Contracts, to the extent they have accrued in the
regular course prior to Closing and do not exceed $15,000 in
aggregate.
(c) Within
ninety (90) days following the Closing Date, ITEX shall have the right to
deliver a written notice to Intagio disagreeing with Intagio’s calculation of
the Cash Receivables and/or Cash Credits, and setting forth ITEX’s revised
calculation of the Cash Receivables or Cash Credits, specifying in reasonable
detail the reasons for such disagreement.
If ITEX
fails to deliver such a written notice within 90 days following the Closing,
Intagio’s determination of the Cash Receivables and Cash Credits shall be final
and binding. If ITEX delivers a written notice of disagreement pursuant to
this
Subsection, ITEX and Intagio shall, during the 30-day period following such
delivery, use their good faith efforts to reach agreement on the disputed items
or amounts in order to determine the amount of Cash Receivables and Cash
Credits, which amount shall not be more than the amount thereof shown in ITEX’s
calculations delivered pursuant to this Subsection nor less than the amount
set
forth in the updated Exhibit
A
delivered at Closing. If ITEX and Intagio are unable to reach such agreement
during such 30-day period, they shall promptly thereafter refer the matter
to a
mutually acceptable accounting firm (the “Determining Accountants”) to promptly
review the disputed items or amounts for the purpose of calculating the amount
of Cash Receivables and Cash Credits. In making such calculation, the
Determining Accountants shall consider only those items or amounts in ITEX’s
written notice as to which ITEX has disagreed. The Determining Accountants
shall
deliver to ITEX and Intagio, as promptly as practicable, a report setting forth
such calculation. Such report shall be final and binding upon ITEX and Intagio.
If a determination is made by the Determining Accountants that the amount of
Intagio’s
calculation exceeded the
actual Cash Receivables at the Closing Date
by more
than $5,000, or if a determination is made by the Determining Accountants that
the amount of Intagio’s calculation of Cash Credits at the Closing Date was
inaccurate by more than $5,000, then the Purchase Price shall be adjusted by
adjusting the Note in an amount equal to the aggregate dollar amount of such
inaccuracies and the costs, fees and expenses of the Determining Accountants
shall be borne by Intagio. Otherwise, ITEX shall bear all such costs, fees
and
expenses.
1.11. Cash
Media Liabilities.
Pursuant
to some of the client contracts and Assigned Contracts, Intagio is contractually
obligated to purchase advertising or media from third parties on behalf of
clients on or before dates set forth in the respective contracts (“Cash Media
Liabilities”), with dates of purchase falling after Closing. ITEX shall be
assigned, and hereby accepts sole responsibility for, all Cash Media Liabilities
as listed on Exhibit
C
hereto.
1.12. Transition
and Integration
(a) Monthly
Statements.
Intagio
will prepare and mail the
July
31, 2008 monthly statements on the standard Intagio statement forms and mailed
in Intagio envelopes to all
Assigned Clients.
Intagio
shall include a message, agreed on by both Intagio and ITEX on the statement
notifying its clients of this transaction. ITEX may include
inserts
welcoming the Intagio Media clients to the ITEX organization. ITEX must deliver
300 pre-printed letters to Intagio no later than July 31. The insert must be
pre-approved by Intagio.
5
(b) 1099
Statements. ITEX
shall be solely responsible for timely distribution and filing of completed
1099B forms for all of the Assigned Contracts for calendar year 2008 (relating
to both pre-Closing transactions and post-Closing transactions).
(c) Website
License and Use.
Intagio
will provide ITEX with the content of
▇▇▇.▇▇▇▇▇▇▇.▇▇▇
and
grants ITEX a perpetual, exclusive, transferable, world-wide license to
reproduce, use and distribute all Intagio proprietary content related to its
media planning and placement business
(
including all website-related
domain and sub-domain names, URLs, software, assets, content, customer,
advertiser and member databases, trademarks, service marks, trade names,
copyrights, contract rights and all other intellectual property and technology
comprising the website ▇▇▇.▇▇▇▇▇▇▇.▇▇▇,
but
excluding the Intagio service ▇▇▇▇ and logo).
Beginning no later than August 15, 2008, and continuing for a period of not
less
than one year, Intagio will 1) forward all web traffic, ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
and
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
to
ITEX’s web address at ▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇,
2)
include an explanatory statement agreed
on
by both Intagio and ITEX on
the
home page of ▇▇▇.▇▇▇▇▇▇▇.▇▇▇
directing Assigned Clients to the above ITEX URL, and 3)
forward
all emails directed to ▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
to
▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇.
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF INTAGIO
Except
as
set forth in the Exhibits attached hereto, and in order to induce ITEX to enter
into and perform this Agreement, Intagio hereby represents and warrants to
ITEX
as follows:
2.1. Organization
and Good Standing.
Intagio
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Delaware, and has the corporate power and authority to
own,
operate and lease its properties and to carry on its business as now conducted.
Intagio is duly qualified to do business and is in good standing in the State
of
California as a foreign corporation.
2.2. Power,
Authorization and Validity.
(a) Power
and Capacity.
Intagio
has the right, power, legal capacity and authority to execute, deliver and
perform its obligations under this Agreement and all agreements to which Intagio
is or will be a party that are required to be executed pursuant to this
Agreement (the “Intagio Ancillary Agreements”), and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Intagio Ancillary Agreements have been
duly and validly approved and authorized by Intagio’s Board of Directors as
required by Delaware law and Intagio’s Certificate of Incorporation and Bylaws,
each as amended to date.
(b) No
Filings.
No
filing, authorization or approval, governmental or otherwise, is necessary
to
enable Intagio to enter into, and to perform its obligations under, this
Agreement and the Intagio Ancillary Agreements.
6
2.3. Authorization;
Enforceability.
All
corporate action on the part of Intagio necessary for the authorization,
execution, delivery and performance of this Agreement and the Intagio Ancillary
Agreements, the consummation of the sale of the Purchased Assets, and the
performance of Intagio’s obligations hereunder and thereunder has been taken.
Each of this Agreement and the Intagio Ancillary Agreements has been duly
executed and delivered by Intagio and each is, or when executed by Intagio
will
be, valid and binding obligations of Intagio enforceable against Intagio in
accordance with their respective terms, except as to the effect, if any, of
(a)
applicable bankruptcy and other similar laws affecting the rights of creditors
generally, and (b) rules of law governing specific performance, injunctive
relief and other equitable remedies.
2.4. No
Violation of Existing Agreements; Third Party Consents and
Approvals.
The
execution and delivery of this Agreement and any Intagio Ancillary Agreement
by
Intagio, and the consummation of the transactions contemplated hereby or
thereby, will not conflict with, or (with or without notice or lapse of time,
or
both) result in a default, termination, breach, impairment or violation of,
or
the creation in any party of the right to accelerate, terminate, modify or
cancel (a) any provision of the Certificate of Incorporation or Bylaws of
Intagio, as currently in effect, (b) in any material respect, any material
agreement, lease, note or other restriction, encumbrance, obligation or
liability to which Intagio is a party or by which Intagio is bound or to which
Intagio’s assets are subject, (c) in any material respect, any provision of any
material law or any material federal, state, local or foreign judgment, writ,
decree, order, statute, rule or regulation applicable to Intagio or its assets
or properties, or (d) any permit used in or necessary for the conduct of
Intagio’s business. The consummation by Intagio of the sale of the Purchased
Assets will not require the consent, approval or authorization of, or
declaration, filing or registration with, any third party.
2.5. No
Brokers.
Intagio
has not incurred, and will not incur, directly or indirectly, as a result of
any
action taken by or on behalf of Intagio, any liability for brokerage or finders’
fees or agents’ commissions or any similar charges in connection with the sale
of the Purchased Assets, this Agreement or any transactions contemplated
hereby.
2.6. Accuracy
of Exhibits A, B and C.
To the
knowledge of Intagio, the trade balances, Cash Receivables, Advertising
Credits and
Cash
Media Liabilities for the Assigned Contracts set forth on Exhibits
A, B and C
are
materially accurate as of the date stated on such Exhibits.
2.7. Employee
Matters.
During
the period from April 1, 2008 through the date hereof, Intagio has not increased
the salary or altered the compensation plan of any Named Employee.
2.8. Litigation.
To the
knowledge of Intagio, (i) there is no action or proceeding pending or threatened
by the Assigned Clients or the Named Employees against Intagio before any court,
administrative agency or arbitral tribunal, and (ii) there are no material
outstanding or unsatisfied judgments, orders, decrees or stipulations to which
Intagio is a party with the Assigned Clients or the Named Employees. Intagio
affirms that no material disputes have been settled or resolved by litigation
or
arbitration since July 31, 2005
with the
Assigned Clients or the Named Employees.
7
2.9. Labor
and Employment Matters.
To the
knowledge of Intagio, there are no material pending claims, actions, suits,
investigations or proceedings alleging any violation of applicable laws, rules
or regulations relating to employment of the Named Employees by Intagio. Intagio
has provided ITEX with the current base compensation amounts of each of the
Named Employees. The Named Employees are employed on an “at-will” basis, and, to
the knowledge of Intagio, are eligible to work and are lawfully employed in
the
United States.
2.10. Contracts.
Other
than the applicable Assigned Contracts, any predecessor trade exchange client
agreement, and agreements related to Intagio’s “Perfect Escapes” business, there
are no agreements, contracts, commitments, leases, arrangements or other
documents by which any of the Assigned Contracts or Advertising Credits are
bound or affected to which Intagio is a party or bound in connection with the
Purchased Assets. Except as set forth in Exhibit B, to the knowledge of Intagio,
there does not exist under any contract by which any of the Assigned Contracts
or Advertising Credits are bound or affected any event of default or event
or
condition that, after notice or lapse of time or both, would constitute a
violation, breach or default on the part of Intagio.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF ITEX
In
order
to induce Intagio to enter into and perform this Agreement, ITEX hereby
represents and warrants to Intagio as follows:
3.1. Organization.
ITEX is
duly organized, validly existing and in good standing under the laws of the
State of Nevada and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its respective business as
now
being conducted.
3.2. Power,
Authorization and Validity.
(a) Power
and Capacity.
ITEX
has the right, power, legal capacity and authority to enter into and perform
its
obligations under this Agreement and all agreements to which ITEX is or will
be
a party that are required to be executed pursuant to this Agreement (the “ITEX
Ancillary Agreements”). The execution, delivery and performance of this
Agreement and the ITEX Ancillary Agreements have been duly and validly approved
and authorized by the Board of Directors of ITEX as required by applicable
law,
and the Articles of Incorporation and Bylaws of ITEX. The execution, delivery
and performance of this Agreement and the Ancillary Agreements by ITEX do not
require the consent of ITEX’s stockholders.
(b) No
Filings.
No
filing, authorization or approval, governmental or otherwise, is necessary
to
enable ITEX to enter into, and to perform its obligations under, this Agreement
or any of the ITEX Ancillary Agreements.
(c) Binding
Obligation.
This
Agreement and the ITEX Ancillary Agreements are, or when executed by ITEX will
be, valid and binding obligations of ITEX, enforceable against it in accordance
with their respective terms, except as enforceability may be limited or affected
by applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, or other laws of general application relating to or affecting the
enforcement of creditors’ rights, and except as enforceability may be limited by
equitable principles, including those limiting the availability of specific
performance, injunctive relief and other equitable remedies providing for
defenses based on fairness and reasonableness, regardless of whether considered
in a proceeding in equity or at law.
8
3.3. No
Violation of Existing Agreements; Third Party Consents and
Approvals.
Neither
the execution and delivery of this Agreement nor any ITEX Ancillary Agreement,
nor the consummation of the transactions contemplated hereby or thereby, will
conflict with, or (with or without notice or lapse of time, or both) result
in a
termination, breach, impairment or violation of (a) any provision of the
Articles of Incorporation or Bylaws of ITEX or the charter documents of any
Subsidiary of ITEX, as currently in effect, (b) in any material respect, any
material instrument or contract to which ITEX or any Subsidiary of ITEX is
a
party or by which ITEX or any Subsidiary is bound, or (c) in any material
respect, any material federal, state, local or foreign judgment, writ, decree,
order, statute, rule or regulation applicable to ITEX or any Subsidiary or
their
respective assets or properties. The consummation by ITEX of the sale of the
Purchased Assets will not require the consent of any third party.
3.4. Brokers.
No
broker, finder or investment banker is entitled to any finder’s or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of ITEX.
3.5. Intagio
Disclosure.
Except
for the representations and warranties expressly made by Intagio in this
Agreement or in any certificate or document delivered in accordance with the
terms of this Agreement, ITEX agrees and acknowledges that Intagio has not
made
any representations or warranties concerning Intagio, or any of its assets,
liabilities, financial condition, business or operations, or any other
matter.
3.6. DISCLAIMER.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PURCHASED ASSETS
ARE BEING SOLD TO ITEX “AS IS” AND INTAGIO EXPRESSLY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES, EXPRESS AND IMPLIED, INCLUDING, WITHOUT
LIMITATION, THOSE OF NONINFRINGEMENT, MERCHANTABILITY AND SUITABILITY AND
FITNESS FOR ANY PARTICULAR PURPOSE OR USE.
WITHOUT LIMITING THE SCOPE OF THE FOREGOING, INTAGIO DOES NOT WARRANT THAT
ANY
ASSIGNED CONTRACTS OR ADVERTISING CREDIT CONTRACTS, INDIVIDUALLY OR
COLLECTIVELY, WILL BE HONORED WITHOUT BREACH BY THE PARTIES TO SUCH
CONTRACTS.
9
ARTICLE
4
COVENANTS
4.1. Employees.
(a) Designation
of Named Employees.
Exhibit
E
attached
hereto sets forth a list of Intagio employees that ITEX wishes to offer
employment or independent contractor agreements to following the Closing (the
“Named Employees”).
(b) Release
from Non-Competition Obligation.
Effective as of the Closing Date, Intagio agrees
to
release each Named Employee of any contractual non-compete obligations in favor
of Intagio that would otherwise restrict such Named Employee from serving as
an
employee or independent contractor of ITEX following the Closing Date.
(c) Benefits.
Intagio
shall pay employee health benefits for the Named Employees through August 31,
2008.
(d) Incentive
Compensation Plans.
ITEX
agrees that any former Intagio employee that becomes an employee or contractor
of ITEX on or after the Closing Date shall be included in any incentive
compensation plan that ITEX generally makes available to other ITEX employees
or
contractors. Intagio shall pay directly to such former Intagio employees any
incentive compensation payment(s) that accrue pursuant to the Intagio employee
incentive compensation plan for such former Intagio employees during their
tenure as Intagio employees, and ITEX shall have no obligation to pay incentive
compensation to former Intagio employees for amounts that accrued under the
Intagio employee incentive compensation plan prior to the Closing
Date.
(e) Employee
Trading Accounts of Named Employees.
Intagio
agrees to provide each Named Employee with a credit balance in an Intagio
employee trading account on the Closing Date with an option to “spend down” his
or her trading account balance within thirty (30) days following the Closing
Date through continued trade activity, or to accept from Intagio a one-time
cash
payment in exchange for the employee’s trade account balance at the rate of
fifty cents ($0.50) per Trade Unit (subject to ordinary withholding). Effective
as of the Closing Date, Intagio shall close the Intagio trading account of
every
Named Employee with a negative balance in such employee trading account on
the
Closing Date.
4.2. [Intentionally
Omitted]
4.3. Confidentiality;
Public Announcements.
Each of
the parties hereto will hold, and will cause its agents, representatives,
consultants and advisers to hold, in confidence all documents and the
Confidential Information furnished to it by or on behalf of another party to
this Agreement in connection with the transactions contemplated by this
Agreement. ITEX and Intagio will consult with one another before issuing any
press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement (including the issuance by ITEX
of
the press release referenced in Section 4.5) and shall not issue any such press
release or make any such public statement prior to such consultation except
as
may be required by applicable law.
10
4.4. Additional
Actions.
After
the Closing Date, each party hereto, at the request of and without any further
cost or expense to the other party, shall take any further actions reasonably
necessary or desirable to carry out the purposes of this Agreement or any
Ancillary Agreement, to vest in ITEX full title to all Purchased Assets, and
to
effect the issuance of the sale consideration to the Intagio pursuant to the
terms and conditions hereof.
4.5. Additional
Actions Related to Assigned Contracts and Advertising Credit
Contracts.
After
the Closing Date, notwithstanding the disclaimer of warranty by Intagio set
forth in Section 3.6 above (as to breaches of Assigned Contracts or Advertising
Credit Contracts by the party to such contract), in the event that a party
to an
Assigned Contract or Advertising Credit Contract requires that performance
under
such contract be completed by Intagio rather than ITEX, at the request of ITEX
Intagio shall take such actions reasonably necessary to assist ITEX in carrying
out its performance obligations under such Assigned Contract or Advertising
Credit Contract, provided
however,
that
ITEX shall bear all costs, fees and expenses of Intagio’s
performance.
4.6. Announcements.
On
August 1, 2008 (or such other date as the parties shall mutually agree upon),
the parties shall announce the transaction to their respective employees and
franchisees. On the same date, ITEX shall issue a press release announcing
the
transaction and shall file such press release
with the
SEC as an exhibit to a Current Report on Form 8-K. No announcements or filings
regarding the transaction shall be made by either party prior to August 1,
2008.
4.7. Covenant
Not to Compete; Nonsolicitation; Non-Hire and Noninterference.
(a) The
parties hereto acknowledge that Intagio has engaged in substantially the same
business as ITEX during some periods prior to the Closing Date. For a period
of
one (1) year from and after the Closing Date, neither Intagio or its
affiliates will knowingly engage directly or indirectly in the wholesale or
retail barter business, nor shall they knowingly act as a media buying or
placement agent for clients in a manner that includes barter transactions.
Notwithstanding the foregoing, however, nothing in this section shall limit
or
prohibit Intagio from continuing to conduct its “Perfect Escapes” business. The
parties acknowledge that certain of the Assigned Clients may participate in
Intagio’s “Perfect Escapes” business, and nothing in this Section shall limit or
constrain in any way Intagio from engaging in the same “Perfect Escapes”
business that it engaged in prior to the Closing Date, or shall place any
limitation on the nature or scope of business relationships between Intagio
and
its “Perfect Escapes” customers. Further, nothing in this Section shall restrict
Intagio from conducting business with any past, present or future customer
of
ITEX after the Closing Date with respect to its “Perfect Escapes” business.
Intagio acknowledges and agrees that this covenant not to compete is reasonable
and necessary to protect ITEX’s legitimate business interests.
(b) For
a
period of two (2) years from and after the Closing Date, Intagio will not (i)
directly or indirectly solicit for employment any of the Named Employees;
(ii) induce
or attempt to induce any Named Employee to work for, render services or provide
advice to or supply confidential business information or trade secrets of ITEX
and its subsidiaries to any person; or (iii) induce or attempt to induce
any Assigned Client to cease doing business with ITEX or its subsidiaries,
brokers
or franchisees or
in any
way interfere with the relationship between any such customer, supplier,
licensee, licensor or other such person and ITEX and its subsidiaries,
brokers
or franchisees.
11
(c) ITEX’s
rights under this Section 4.8 may be enforced by any successor or assign of
ITEX, or its affiliates.
(d) If
the
final judgment of a court of competent jurisdiction declares that any term
or
provision of this Section 4.8 is invalid or unenforceable, the parties hereto
agree that the court making the determination of invalidity or unenforceability
will have the power to reduce the scope, duration or area of the term or
provision, to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid
or
unenforceable term or provision, and this Agreement will be enforceable as
so
modified after the expiration of the time within which the judgment may be
appealed.
4.8. Information.
At or
prior to the Closing, Intagio shall deliver to ITEX the following information
with respect to the Assigned Contracts and Assigned Clients:
(a) A
list of
vendors and contact information
relating
to Intagio’s media planning and placement business,
including outsourced services utilized by Intagio to perform the Assigned
Contracts and fulfill Cash Media Liabilities;
(b) A
list of
vendors and suppliers that service or relate to the Illinois Office
Space;
(c) An
electronic copy of Intagio’s latest employee manual applicable to the Named
Employees; and
(d) A
description of the compensation packages and copies of the employee files for
the Named Employees.
ARTICLE
5
CLOSING
DELIVERIES
5.1. ITEX
Deliveries.
On the
Closing Date, ITEX shall deliver to Intagio:
(a) $218,421.01
in the form of a certified bank check or wire transfer;
(b) An
executed copy of the Note; and
(c) An
executed copy of a Security Agreement in the form attached hereto as
Exhibit
F;
12
(d) An
executed First Amended Office Services Agreement;
(e) An
executed Office Equipment ▇▇▇▇ of Sale.
5.2. Intagio
Deliveries.
On the
Closing Date, Intagio shall deliver to ITEX:
(a) Copies
of
all historical account data and transaction history data for the Assigned
Contracts and associated accounts in intangible form by electronic delivery,
to
the extent in Intagio’s possession as of the Closing Date and reasonably
necessary to enable ITEX to conduct its commercial trading operations among
the
Assigned Clients following the Closing substantially in the manner in which
it
had previously been conducted by Intagio, including the information specified
in
Section 4.7.;
(b) Copies
of
the Assigned Contracts, if and only to the extent to which Intagio is in
physical possession of, and is able to locate copies of, such Assigned
Contracts; and
(c) An
executed copy of the Security Agreement.
(d) An
executed First Amended Office Services Agreement;
(e) An
executed Office Equipment ▇▇▇▇ of Sale.
ARTICLE
6
REMEDIES
FOR AGREEMENT BREACHES
6.1. Time
Limitation.
All
representations and warranties contained in this Agreement or in any certificate
or document delivered in accordance with the terms of this Agreement, shall
survive until the 24-month anniversary of the Closing Date, and shall not be
deemed waived or otherwise affected by any investigation made or any knowledge
acquired with respect thereto, or by any notice given pursuant to Section 6.2
or
otherwise; provided, however, that ITEX’s right to make any claim or bring any
legal action against Intagio based upon a breach of its representations and
warranties herein shall forever expire if written notice of such claim or legal
action (along with a detailed written notice of the alleged facts underlying
such claim or action) is not given to Intagio before the end of such 24-month
period. All of the covenants and obligations of the parties contained in this
Agreement or any certificate or document delivered in accordance with the terms
of this Agreement shall survive (i) until fully performed or fulfilled, unless
non-compliance with such covenants or obligations is waived in writing by the
party or parties entitled to such performance or (ii) if not fully performed
or
fulfilled, until the expiration of the relevant statute of
limitations.
6.2. Post-Closing
Indemnification Provisions for Benefit of ITEX.
(a) Provided
that ITEX makes a written claim for indemnification pursuant to this Section
before the expiration of the applicable time period set forth in Section 6.1,
Intagio shall indemnify ITEX, its Subsidiaries, and their respective officers,
directors and representatives (collectively, the “ITEX Indemnitees”) from and
against, hold each of them harmless from, and reimburse each of them for,
13
(i) the
entirety of any Adverse Consequences (as defined in Section 7.7), which such
ITEX Indemnitees actually suffer through and after the date of the claim for
indemnification directly resulting from, arising out of, relating to, or caused
by any breach
by
Intagio of any of its representations, warranties, covenants or obligations
contained in this Agreement, any certificate or document delivered in accordance
with the terms of this Agreement, or any schedule hereto or
thereto;
(ii) any
claim
by any Person for brokerage or finder’s fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by any
such
Person with Intagio (or any Person acting on its behalf) in connection with
any
of the transactions contemplated by this Agreement;
(iii) any
claim
asserted by any former employee of Intagio who becomes an employee or contractor
of ITEX on or around the Closing Date, to the limited extent that such claim
is
based solely upon events that occurred prior to the Closing Date and the
employee seeks damages from ITEX with respect to events arising solely prior
to
the Closing Date, or that such claim is based on claims arising directly out
of
the sale of the Purchased Assets but not from post-Closing acts or omissions
of
ITEX (it being agreed and understood that Intagio shall bear no responsibility
whatsoever for any claims or damages arising from or for acts or omissions
that
occur following the Closing Date, or that occur both prior to and following
the
Closing Date);
(iv) any
and
all debts, liabilities, and obligations of Intagio (to the extent not required
to be assumed by ITEX under this Agreement), whether accrued, contingent or
otherwise; and
(v) any
and
all debts, liabilities, and obligations of Intagio arising out of the failure
of
Intagio to comply with the Bulk Sales Law of the State of California.
(b) Notwithstanding
the foregoing or any other provision of this Agreement, the liability of Intagio
to the ITEX Indemnitees under this Agreement (whether pursuant to this or any
other provision of this Agreement and whether in contract, tort (including
negligence) or otherwise) shall not exceed $62,500. ITEX may reduce the
principal amount due under the Note to satisfy Intagio’s indemnification
obligations arising under this Agreement, up to the maximum indemnification
amount stated above (provided that the principal amount due under the Note
at
any particular time shall in no event be reduced to less than
zero).
6.3. Post-Closing
Indemnification Provisions for Benefit of Intagio.
Provided that Intagio makes a written claim for indemnification against ITEX
pursuant to this Section 6.3, ITEX shall indemnify Intagio and its
representatives (collectively, the “Intagio Indemnitees”) from and against the
entirety of any Adverse Consequences which the Intagio Indemnitees may suffer
directly resulting from, arising out of, relating to or caused by any
breach
by
ITEX of any of its representations, warranties, covenants or obligations
contained in this Agreement. Except as set forth in the following sentence,
ITEX’s total liability for claims for indemnification under this Agreement or
breach of any representations or warranties exceed the amount of the
consideration
otherwise payable to Intagio pursuant to this Agreement.
Notwithstanding any limitation on liability set forth in this Agreement, ITEX
shall be fully liable to Intagio and to third parties, without limitation of
amount, for any Adverse Consequences arising from any failure by ITEX’s to make
full and timely payment in satisfaction of Cash Media Liabilities or to satisfy
any other liability being assumed by ITEX under this Agreement.
14
6.4. Matters
Involving Third Parties.
(a) If
any
third party shall notify any party (the “Indemnified Party”) with respect to any
matter (a “Third Party Claim”) which may give rise to a claim for
indemnification against any other party (the “Indemnifying Party”) under this
Article 6, then the Indemnified Party shall promptly notify each Indemnifying
Party, thereof in writing; provided, however, that no delay on the part of
the
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless the Indemnifying Party
is materially prejudiced thereby.
(b) Any
Indemnifying Party will have the right to defend the Indemnified Party against
the Third Party Claim with counsel of its choice reasonably satisfactory to
the
Indemnified Party so long as the Indemnifying Party notifies the Indemnified
Party in writing, within fifteen (15) days after the Indemnified Party has
given
written notice of the Third Party Claim, that the Indemnifying Party will
indemnify the Indemnified Party from and against the entirety of any Adverse
Consequences that the Indemnified Party may suffer directly resulting from,
arising out of, relating to or caused by the Third Party Claim.
(c) So
long
as the Indemnifying Party is conducting the defense of the Third Party Claim
in
accordance with Section 6.4(b) above, (A) the Indemnified Party may retain
separate co-counsel at its sole cost and expense and participate in the defense
of the Third Party Claim, (B) the Indemnified Party will not consent to the
entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnifying Party (not
to
be withheld unreasonably), and (C) the Indemnifying Party will not consent
to
the entry of any judgment or enter into any settlement with respect to the
Third
Party Claim without the prior written consent of the Indemnified Party (not
to
be withheld unreasonably).
ARTICLE
7
MISCELLANEOUS
7.1. Entire
Agreement; Assignment.
This
Agreement (including the Exhibits hereto) (a) constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings both written and oral
between the parties with respect to the subject matter hereof (provided that
the
confidentiality provisions in Sections 12
and
13
of the
LOI shall remain in effect) and (b) shall not be assigned by operation of law
or
otherwise without the prior written consent of the parties.
15
7.2. Validity.
If any
provision of this Agreement or the application thereof to any Person or
circumstance is held invalid or unenforceable, the remainder of this Agreement
and the application of such provision to other Persons or circumstances shall
not be affected thereby and to such end the provisions of this Agreement are
agreed to be severable.
7.3. Notices.
Any
notice, request or demand desired or required to be given hereunder shall be
in
writing given by personal delivery, confirmed facsimile transmission or
overnight courier service, in each case addressed as respectively set forth
below or to such other address as any party shall have previously designated
by
such a notice. The effective date of any notice, request or demand shall be
the
date of personal delivery, the date on which successful facsimile transmission
is confirmed or the date actually delivered by a reputable overnight courier
service, as the case may be, in each case properly addressed as provided herein
and with all charges prepaid.
If
to
ITEX:
ITEX
Corporation
▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇ Attn:
▇▇▇▇▇▇ ▇▇▇▇▇, CEO
Facsimile
Number: 425.463.4044
If
to
Intagio:
The
Intagio Group, Inc.
▇▇
▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇, CEO
Facsimile
Number: 415.543.0375
,
or to
such other address as the Person to whom written notice is given may have
previously furnished to the others in writing in the manner set forth
above.
7.4. Governing
Law.
(a) Except
for the mandatorily applicable provisions of Delaware law, this Agreement shall
be governed by and construed in accordance with the laws of the State of
California without regard to the principles of conflicts of law
thereof.
(b) Each
of
the parties hereto consents to the jurisdiction of any state or federal court
located within the county of San Francisco in the State of California, and
irrevocably agrees that all actions or proceedings relating to this Agreement
or
the transactions contemplated hereby (other than those determinations and
findings expressly delegated to the Determining Accountants in Section 1.7)
shall be litigated in one of such courts, and each of the parties waives any
objection that it may have based on improper venue or forum
non conveniens
to the
conduct of any such action or proceeding in any such court and waives personal
service of any and all process upon it, and consents to all such service of
process made in the manner set forth in Section 7.3. Nothing contained in this
Section 7.4 shall affect the right of any party to serve legal process on any
other party in any other manner permitted by law.
16
7.5. Descriptive
Headings; Section References.
The
descriptive headings herein are inserted for convenience of reference only
and
are not intended to be part of or to affect the meaning or interpretation of
this Agreement. All references herein to Articles, Sections, subsections,
paragraphs and clauses are references to Articles, Sections, subsections,
paragraphs and clauses of this Agreement unless specified
otherwise.
7.6. Parties
in Interest.
This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto and its successors and permitted assigns. Nothing in this Agreement
is
intended to or shall confer upon any other Person (including, by way of example
and not limitation, any Named Employee) any rights, benefits or remedies of
any
nature whatsoever under or by reason of this Agreement.
7.7. Certain
Definitions.
For the
purposes of this Agreement, the term:
(a) “Adverse
Consequences” means all actions, suits, proceedings, hearings, investigations,
charges, complaints, claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines, costs, amounts paid in settlement,
liabilities, obligations, taxes, liens, losses, accounting and other expenses,
and fees, including court costs and reasonable attorneys’ fees and expenses,
whether or not involving a third party claim, in each case net of (a) any
insurance recoveries (after taking into account any costs ITEX or Intagio,
as
applicable, reasonably incurs due to such recoveries, including those that
may
result from retrospective premium adjustments, experience-based premium
adjustments, and indemnification obligations), and (b) any tax benefit (after
taking into account any tax detriment of any indemnity, including tax costs
resulting from a reduction in basis, and the resulting reduction in depreciation
and amortization or increase in gain recognized on the sale of the Purchased
Assets, if the indemnification is treated as an adjustment of the purchase
price).
(b) “Business
Day” means any day other than a day on which banks in California are required or
authorized by law to be closed.
(c) “Confidential
Information” means any information about Intagio disclosed to ITEX, or about
ITEX disclosed to Intagio, in connection with the transactions contemplated
by
this Agreement, including, without limitation, analyses, data studies, or other
documents prepared by a disclosing party or any of its representatives, unless
(a) such information is already known to the receiving party or its
representatives or such information becomes publicly available through no fault
of the receiving party or its representatives, (b) the use of such information
is necessary and appropriate in making any filing or obtaining any consent
or
approval required for the consummation of the transactions contemplated by
this
Agreement, or (c) the furnishing or use of such information is required by
or
necessary or appropriate in connection with legal proceedings.
17
(d) “GAAP”
means United States generally accepted accounting principles as in effect from
time to time.
(e) “include”
or “including” means “include, without limitation” or “including, without
limitation,” as the case may be, and the language following “include” or
“including” shall not be deemed to set forth an exhaustive list.
(f) “Losses”
shall mean the dollar value of any and all loss, obligation, deficiency, damage,
claim, liability, cost and expense incurred as a result of any Adverse
Consequence, including the amount of any settlement entered into pursuant to
this Agreement, and all reasonable legal fees and other expenses.
(g) “Person”
means an individual, corporation, partnership, limited liability company,
association, trust, unincorporated organization or other legal entity including
any governmental entity.
(h) “Subsidiary”
or “Subsidiaries” of any Person means any corporation, partnership, limited
liability company, association, trust, unincorporated association or other
legal
entity of which such Person (either alone or through or together with any other
subsidiary), owns, directly or indirectly, more than fifty percent (50%) of
the
capital stock the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.
7.8. Personal
Liability.
Except
as expressly set forth herein, this Agreement shall not create or be deemed
to
create or permit any personal liability or obligation on the part of any
officer, director, employee, agent, shareholder or representative of any party
hereto.
7.9. Specific
Performance.
The
parties hereby acknowledge and agree that the failure of any party to perform
its agreements and covenants hereunder, including its failure to take all
actions as are necessary on its part for the consummation of the sale of the
Purchased Assets, will cause irreparable injury to the other party, for which
damages, even if available, will not be an adequate remedy. Accordingly, each
party hereby consents to the issuance of injunctive relief by any court of
competent jurisdiction to compel performance of such party’s obligations and to
the granting by any court of the remedy of specific performance of its
obligations hereunder.
7.10. Counterparts.
This
Agreement may be executed by facsimile and in one or more counterparts, each
of
which shall be deemed to be an original but both of which shall constitute
one
and the same agreement.
7.11. Amendment.
This
Agreement may be amended by action taken by Intagio and ITEX at any time. This
Agreement may be amended only by an instrument in writing signed on behalf
of
the parties hereto.
7.12. Extension;
Waiver.
At any
time prior to the Closing Date, either party hereto may (i) extend the time
for
the performance of any of the obligations or other acts of the other party,
(ii)
waive any inaccuracies in the representations and warranties of the other party
contained herein or in any document, certificate or writing delivered pursuant
hereto, or (iii) waive compliance by the other party with any of the agreements
or conditions contained herein. Any agreement on the part of either party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument, in writing, signed by such party. The failure of either party hereto
to assert any of its rights hereunder shall not constitute a waiver of such
rights.
18
7.13. Expenses.
Except
as otherwise specified in this Agreement, each party shall bear its respective
costs and expenses (including any broker’s or finder’s fees) incurred at any
time in connection with pursuing or consummating the transactions contemplated
hereby, including, by way of example and not limitation, all expenses related
to
such party’s attorneys, accountants and other advisors.
7.14. Additional
Limitation of Liability.
NOTWITHSTANDING
ANY PROVISION HEREIN TO THE CONTRARY, IN NO EVENT SHALL EITHER PARTY, ITS
AFFILIATES, OR ANY OF ITS OFFICERS, DIRECTORS, OR EMPLOYEES BE LIABLE UNDER
ANY
THEORY OF TORT, CONTRACT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY
FOR LOST PROFITS OR EXAMPLARY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES,
EACH
OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER
SUCH DAMAGES WERE FORESEEABLE OR WHETHER A PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES AND EVEN IF THE REMEDIES SET FORTH HEREIN FAIL
OF
THEIR ESSENTIAL PURPOSE.
19
[SIGNATURE
PAGE – ASSET PURCHASE AGREEMENT DATED AS OF AUGUST 1, 2008 BY AND BETWEEN
ITEX CORPORATION AND THE INTAGIO GROUP, INC.]
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the date first above
written.
|
“ITEX”
|
“Intagio”
|
|||||
|
ITEX
CORPORATION
|
THE
INTAGIO GROUP, INC.
|
|||||
|
By:
|
/s/
▇▇▇▇▇▇ ▇▇▇▇▇
|
By:
|
/s/
▇▇▇▇ ▇▇▇▇
|
|||
|
Name:
|
▇▇▇▇▇▇
▇▇▇▇▇
|
Name:
|
▇▇▇▇
▇▇▇▇
|
|||
|
Title:
|
CEO
|
Title:
|
President
|
|||
20
TABLE
OF CONTENTS
|
Page
|
||
|
ARTICLE
1
|
SALE
AND TRANSFER OF ASSETS; CLOSING
|
1
|
|
1.1.
|
Sale
of Assets
|
1
|
|
1.2.
|
Excluded
Assets
|
2
|
|
1.3.
|
Assumption
of Liabilities by ITEX
|
2
|
|
1.4.
|
Excluded
Liabilities
|
3
|
|
1.5.
|
Assumption
of Office Lease, etc
|
3
|
|
1.6.
|
Purchase
Price
|
3
|
|
1.7
|
Allocation
of Purchase Price
|
4
|
|
1.8.
|
Settlement
of Earnout Payment Obligation.
|
4
|
|
1.9.
|
Closing
|
4
|
|
1.10.
|
Cash
Receivables and Cash Credits.
|
4
|
|
1.11.
|
Cash
Media Liabilities
|
5
|
|
1.12
|
Transition
and Integration
|
5
|
|
ARTICLE
2
|
REPRESENTATIONS
AND WARRANTIES OF INTAGIO
|
6
|
|
2.1.
|
Organization
and Good Standing
|
6
|
|
2.2.
|
Power,
Authorization and Validity.
|
6
|
|
2.3.
|
Authorization;
Enforceability
|
7
|
|
2.4.
|
No
Violation of Existing Agreements; Third Party Consents and
Approvals
|
7
|
|
2.5.
|
No
Brokers
|
7
|
|
2.6.
|
Accuracy
of Exhibits A, B and C
|
7
|
|
2.7.
|
Employee
Matters
|
7
|
|
2.8
|
Litigation
|
7
|
|
2.9
|
Labor
and Employment Matters
|
8
|
|
2.10.
|
Contracts
|
8
|
|
ARTICLE
3
|
REPRESENTATIONS
AND WARRANTIES OF ITEX
|
8
|
|
3.1.
|
Organization
|
8
|
|
3.2.
|
Power,
Authorization and Validity.
|
8
|
|
3.3.
|
No
Violation of Existing Agreements; Third Party Consents and
Approvals
|
9
|
|
3.4.
|
SEC
Reports
|
9
|
|
3.5.
|
Brokers
|
9
|
|
3.6.
|
Trade
Unit Revenue
|
9
|
|
3.7.
|
Intagio
Disclosure
|
9
|
|
3.8.
|
DISCLAIMER
|
9
|
|
ARTICLE
4
|
COVENANTS
|
10
|
|
4.1.
|
Employees.
|
10
|
|
4.2.
|
Certain
Filings; Reasonable Efforts
|
10
|
i
|
4.3.
|
Confidentiality;
Public Announcements
|
10
|
|
4.4.
|
Additional
Actions
|
11
|
|
4.5.
|
Announcement
|
11
|
|
ARTICLE
5
|
CLOSING
DELIVERIES
|
12
|
|
5.1.
|
ITEX
Deliveries
|
12
|
|
5.2.
|
Intagio
Deliveries
|
13
|
|
ARTICLE
6
|
REMEDIES
FOR AGREEMENT BREACHES
|
13
|
|
6.1.
|
Time
Limitation
|
13
|
|
6.2.
|
Post-Closing
Indemnification Provisions for Benefit of ITEX. 15
|
13
|
|
6.3.
|
Post-Closing
Indemnification Provisions for Benefit of Intagio
|
14
|
|
6.4.
|
Matters
Involving Third Parties.
|
15
|
|
ARTICLE
7
|
MISCELLANEOUS
|
15
|
|
7.1.
|
Entire
Agreement; Assignment
|
15
|
|
7.2.
|
Validity
|
16
|
|
7.3.
|
Notices
|
16
|
|
7.4.
|
Governing
Law; Waiver of Jury Trial.
|
16
|
|
7.5.
|
Descriptive
Headings; Section References
|
17
|
|
7.6.
|
Parties
in Interest
|
17
|
|
7.7.
|
Certain
Definitions
|
17
|
|
7.8.
|
Personal
Liability
|
18
|
|
7.9.
|
Specific
Performance
|
18
|
|
7.10.
|
Counterparts
|
18
|
|
7.11.
|
Amendment
|
18
|
|
7.12.
|
Extension;
Waiver
|
18
|
|
7.13.
|
Expenses
|
19
|
|
7.14
|
Additional
Limitation of Liability
|
19
|
TABLE
OF EXHIBITS
|
Assigned
Contracts and Cash Receivables
|
|
|
Exhibit
B
|
Advertising
Credits
|
|
Exhibit
C
|
Cash
Media Liabilities
|
|
Exhibit
D
|
Form
of Promissory Note
|
|
Exhibit
E
|
List
of Named Employees
|
|
Exhibit
F
|
Security
Agreement
|
|
First
Amended Office Services Agreement
|
|
|
Exhibit
H
|
Office
Equipment ▇▇▇▇ of Sale
|
ii