ASSET PURCHASE AGREEMENT
AND PLAN OF REORGANIZATION
THIS ASSET PURCHASE AGREEMENT AND PLAN OF REORGANIZATION is made this 27th
day of July, 2006, by and between ATLANTIC SEABOARD, INC., a Nevada corporation
("Atlantic"), GLOBAL WATAIRE, INC., a Nevada corporation ("Global") and DIGITAR,
INC., a Wyoming corporation ("DigiTar"), DIGITAR, LLP, an Idaho limited
liability partnership ("DigiTar LLP"), and XXXXX X. X. XXXXXXXX, XXXXXXXX
XXXXXXX-XXXXXXXX, XXXX X. XXXXXXXX (being all the shareholders of DigiTar,
collectively, the "Shareholders"), and XXXXXX XXXXXXXXXX ("Rampelberg"). The
shareholders and Rampelberg are hereinafter collectively referred to as the
"Principals."
WHEREAS, the Shareholders are all of the shareholders of DigiTar; and
WHEREAS, DigiTar desires to sell certain of DigiTar's assets relating to
DigiTar's business and operations as such business and operations are currently
operated (the "Business"), and Atlantic desires to purchase such assets and
assume certain of DigiTar's liabilities, in a form of a transaction that
qualifies as a tax-free reorganization under Section 368 of the Internal Revenue
Code of 1986;
FURTHER, It is agreed by the parties that the immediate goal of the Asset
Purchase Agreement and Plan of Reorganization is to allow Atlantic and its
parent corporation, Global, to raise capital to facilitate the growth and
success of the Business and, thereby, reward DigiTar as a co-shareholder in
Atlantic. It is also agreed that the longer term goal of the Asset Purchase
Agreement and Plan of Reorganization is to allow Atlantic to achieve a
successful IPO in the U. S. securities market with the same effect.
NOW, THEREFORE, in consideration of the mutual representations, warranties
and covenants herein contained, and on the terms and subject to the conditions
herein set forth, the parties hereto, intending to be legally bound, hereby
covenant and agree as follows:
1. Sale and Purchase of Assets. Subject to and upon the terms and
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conditions contained herein, at the Closing (as hereinafter defined), DigiTar
shall sell, transfer, assign, convey and deliver to Atlantic, and Atlantic shall
purchase, accept and acquire from DigiTar, substantially all of the assets of
DigiTar, including but not limited to the assets owned or used by DigiTar in the
Business, except for the intellectual property (the "IP" as hereinafter defined.
All such assets to be acquired as provided herein are sometimes collectively
referred to as the "Purchased Assets." Notwithstanding anything herein to the
contrary, the Purchased Assets shall specifically exclude those assets of
DigiTar LLP set forth in Schedule 1 hereto (collectively, the "IP"), which are
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the subject of a separate exclusive license agreement between DigiTar LLP and
Atlantic (the "License Agreement"). Without limiting the generality of the
foregoing description of the Purchased Assets, the Purchased Assets shall
include without limitation the following:
(a) Inventory. All inventory, whether raw material,
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work-in-process or finished goods, of DigiTar, if any, used in connection with
the Business (collectively, the "Inventory").
(b) Equipment. All the furniture, office equipment, computer
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equipment, machinery, equipment, vehicles, and other items of personal property
owned by DigiTar including, without limitation, the items set forth on Schedule
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1 attached hereto (collectively, the "Fixed Assets").
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(c) Intangibles. All of the right, title and interest DigiTar may
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possess in and to the following, whether owned or licensed by DigiTar: the
corporate name used by DigiTar; the customer lists used by DigiTar in connection
with the Business; the goodwill of DigiTar (collectively, the "Intangible
Assets").
(d) Records. Copies of all books, documents and records of, or
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relating to any material necessary to the operation of the Business (including
all financial and business records, customer lists and files, supplier records,
insurance polices and any claims or credits thereunder).
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(e) Employee Records. Copies of all personnel records and payroll
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records for the current and last two calendar years for all employees of
DigiTar.
(f) Contract Rights. All rights, privileges and interests of
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DigiTar arising from any contract, agreement, purchase orders, deposits and
other contractual rights to the extent set forth on Schedule 1 (the "Assigned
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Contracts").
(g) Computer Software. All commercially available computer
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applications and operating systems programs which are used in the operation of
the Business (including third party packaged software products), with the
exception of the IP.
(h) Licenses and Permits. All right, title and interest in any
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assignable licenses and permits relating to the Business.
(i) Supplies. All materials and supplies (other than Inventory)
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and sundry items owned by DigiTar relating to the operation of the Business and
the Purchased Assets;
(j) Prepaid Expenses. All rights and privileges arising from
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DigiTar's prepaid expenses, prepayments and deposits.
(k) Accounts Receivable. All accounts receivable, notes
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receivable (and any security therefore) and all other receivables of any other
kind (collectively, the "Accounts Receivable").
2. Closing. The closing of the transactions contemplated hereby (the
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"Closing") shall occur on the date hereof.
3. Purchase Price. The consideration (the "Purchase Price"), to be
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paid to DigiTar for the Purchased Assets and the non-compete agreements
described herein below shall be payable as follows:
(a) Forty Nine (49%) percent of the issued and outstanding
common stock of Atlantic (the "Common Stock") and 10,000,000 shares of
Atlantic's Voting Convertible Preferred Stock (the "Preferred Stock") shall be
issued to DigiTar at the Closing subject to the provisions of paragraph 6
(Restricted Shares) hereof. The shares of the Common Stock to be issued to
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DigiTar hereunder shall constitute 49 percent of the issued and outstanding
shares of the Common Stock as of the date hereof. Each share of Preferred Stock
shall be entitled to 2 votes in any matter that requires the shareholder vote of
the Atlantic common shareholders. In addition, the Preferred Stock shall be
entitled to be converted into 21% of the common stock ownership of Atlantic at
any time up to the time Atlantic makes a successful filing with the U.S.
Securities and Exchange Commission of an SB-2 form or equivalent for the
registration of its shares. At the time of the closing, Atlantic will change its
corporate name to DigiTar Inc.
(b) The Assumed Liabilities will be assumed and paid by Atlantic
as provided in 4.0 herein.
(c) Twenty million shares of the Class "A" common stock of Global
(the "Global Shares") which shall be held in escrow, for the benefit of DigiTar
for a period of one year from the date of this Agreement at which time the
Global shares would pass free of escrow to DigiTar. However, if, before the end
of that one year period, Atlantic completes an effective filing with the U.S.
Securities and Exchange Commission to do an IPO, the shares of Global held in
escrow will automatically revert back to Global under the terms of an Escrow
Agreement described in Exhibit 2 attached hereto.
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4. Assumed Liabilities.
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(a) Commencing from and after the Closing, Atlantic shall assume
and agree to pay, perform and discharge, promptly when due all duties,
liabilities and obligations under the Assigned Contracts, as set forth in
Schedule 4 attached hereto arising after the Closing (the "Assumed
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Liabilities").
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5. Registration Rights Agreement. Atlantic shall register the resale
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of the shares of the Common Stock and shares of the Common Stock issuable upon
the conversion of Preferred Stock pursuant to the terms and conditions of a
Registration Rights Agreement attached hereto as Exhibit 3.
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6. Restricted Shares. All shares of the Atlantic Common Stock, the
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Preferred Stock to be delivered hereunder shall be restricted in their resale as
provided in the Securities Act of 1933, as amended, and shall contain a legend
as required by Rule 144 promulgated under the Securities Act ("Rule 144"), which
shall read as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST
THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT.
7. Employment Agreements and Non-Compete Agreements by the Principals.
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At the Closing, the Principals will each execute an Employment Agreement and a
Non-Compete Agreement.
8. Closing Deliveries by DigiTar, DigiTar LLP, and the Principals. In
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order to consummate the transactions contemplated hereby, the following
documents shall be executed and/or delivered by DigiTar, DigiTar LLP, and the
Principals at or, as indicated, after the Closing, as appropriate:
(a) A Xxxx of Sale and Assignment in form and substance acceptable
to Atlantic;
(b) The Registration Rights Agreements.
(c) A Certificate of Good Standing for DigiTar from the Wyoming
Secretary of State dated within 30 days of the Closing.
(d) A duly executed Secretary's Certificate as to DigiTar's
Bylaws, incumbent officers and directors and resolutions adopted by DigiTar's
Board of Directors and the Shareholders authorizing the execution of this
Agreement, confirmation of the sale provided for herein and performance by
DigiTar and the Principals of all their obligations hereunder.
(e) An officer's certificate dated as of the Closing confirming
that the representations and warranties of DigiTar are true and correct as of
the Closing.
(f) A copy of the fully executed License Agreement between DigiTar
LLP and Atlantic pursuant to which the IP shall be licensed to Atlantic.
(g) From time-to-time after the Closing, at Atlantic's request and
without further consideration from Atlantic and Global, DigiTar, DigiTar LLP,
and the Principals shall execute and deliver such other instruments of
conveyance and transfer and take such other action as Atlantic and Global
reasonably may require to convey, transfer to and vest in Atlantic and to put
Atlantic in possession of the Purchased Assets with customary warranties of
title.
9. Closing Deliveries by Atlantic and Global. In order to consummate
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the transactions contemplated hereby, the following documents shall be executed
and/or delivered by Atlantic and Global at or, as indicated, after the Closing,
as appropriate:
(a) An Assumption of Liabilities Agreement in a form acceptable to
DigiTar and the Principals.
(b) An Assumed Contracts Agreement in a form acceptable to DigiTar
and the Principals.
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(c) Non-Compete Agreements.
(d) Employment Agreements.
(e) Escrow Agreement.
(f) Registration Rights Agreements.
(g) A copy of the resolutions of Atlantic's and Global's Board of
Directors approving this Agreement and its related schedules and exhibits.
(h) At the Closing, and at all times thereafter as may be
necessary, Atlantic shall execute and deliver to DigiTar, DigiTar LLP, and the
Principals such other instruments as shall be reasonably necessary or
appropriate to evidence the assumption by Atlantic of the Assumed Liabilities,
including without limitation those arising under the Assigned Contracts, and to
comply with the purposes and intent of this Agreement.
10. Global and Atlantic's Representations and Warranties. Global and
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Atlantic represent and warrant that the following are true and correct as of
this date and will be true and correct through the Closing as if made on that
date:
(a) Organization and Good Standing. Atlantic is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of Nevada, with all requisite power and authority to own its properties
and to execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
(b) Authorization and Validity. The execution, delivery and
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performance of this Agreement and the other agreements contemplated hereby by
Global and Atlantic and the consummation of the transactions contemplated hereby
and thereby, have been unanimously approved and duly authorized by the Board of
Directors of Global and Atlantic. This Agreement and each other agreement
contemplated hereby have been or will be duly executed and delivered by Global
and Atlantic as the case may be, and constitute, or will constitute as of the
Closing, legal, valid and binding obligations of Global and Atlantic,
enforceable against each of them in accordance with their respective terms.
(c) Violation. Neither the execution and performance of this
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Agreement or the other agreements contemplated hereby, nor the consummation of
the transactions contemplated hereby or thereby will (i) conflict with, or
result in a breach of the terms, conditions and provisions of, or constitute a
default under, the Articles of Incorporation or Bylaws of Atlantic or of any
agreement, indenture or other instrument under which Atlantic is bound, or (ii)
violate or conflict with any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or body
having jurisdiction over Atlantic or the properties or assets of Atlantic.
(d) Finder's Fee. Atlantic has not incurred any obligation for
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any finder's, broker's or agent's fee in connection with the transactions
contemplated hereby for which DigiTar, DigiTar LLP, or any of the Principals may
be liable.
11. Representations and Warranties of DigiTar, DigiTar LLP, and the
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Principals. Except as set forth on the schedules attached to this Agreement,
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DigiTar, DigiTar LLP and the Principals, and each of them, hereby jointly and
severally represent and warrant that the following are true and correct as of
this date and will be true and correct through the Closing as if made on that
date.
(a) Organization and Good Standing. DigiTar is a corporation duly
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organized, validly existing and in good standing under the laws of Wyoming, with
all requisite power and authority to carry on the Business in which it is
engaged and to own the properties it owns. DigiTar is duly qualified to do
business in Idaho and every other jurisdiction where DigiTar is required by law
to be qualified to transact business. DigiTar does not have any assets,
employees or offices in any state other than in Ada County, Idaho.
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(b) Capitalization. The Shareholders own all the capital stock of
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DigiTar, free and clear of all liens, liabilities, claims, encumbrances,
equities, voting agreements, voting trust agreements, and proxies. Each
outstanding share of capital stock of DigiTar has been legally and validly
issued and is fully paid and non-assessable.
(c) Corporate Records. Copies of DigiTar's Articles of
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Incorporation and any amendments thereto, and it's Bylaws of DigiTar and all
amendments thereto have been made available to Atlantic and are full and
complete copies thereof. Atlantic has been given full and complete access to
the minute books of DigiTar.
(d) Authorization and Validity. The execution, delivery and
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performance of this Agreement and the other agreements contemplated hereby by
DigiTar, DigiTar LLP, and the Principals, and the consummation of the
transactions contemplated hereby and thereby, have been unanimously approved and
duly authorized by the Board of Directors of DigiTar and Partners of DigiTar
LLP. This Agreement and each other agreement contemplated hereby have been or
will be duly executed and delivered by DigiTar, DigiTar LLP and the Principals,
as the case may be, and constitute, or will constitute as of the Closing, legal,
valid and binding obligations of DigiTar, DigiTar LLP, enforceable against each
of them in accordance with their respective terms.
(e) Financial Statements. DigiTar shall deliver by August 31,
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2006 to Atlantic and Global copies of the unaudited balance sheets of DigiTar
and the related statements of income and cash flows (or the equivalent) for the
12 month period then ended August 31, 2006 (collectively, the "Financial
Statements"). The Financial Statements will be true, correct and complete and
fairly present the financial condition and results of operations of DigiTar as
of the dates and for the periods indicated and will be prepared on a consistent
basis with prior practices. To the knowledge of DigiTar, it will have no
liability or obligation, whether absolute, contingent or otherwise as of the
respective dates of the Financial Statements required to be recorded, reflected
or disclosed thereon or therein which were not so recorded, reflected or
disclosed. The accounts receivable shown on the latest balance sheet and all
accounts receivable reflected on DigiTar's books and records that have arisen
subsequent to the date of the latest balance sheet have been collected or are
owed in the amount shown on such latest balance sheet or such books and records
(less the allowance in the aggregate for doubtful accounts shown thereon or in
such books and records).
(f) Liabilities and Obligations. To the knowledge of DigiTar, the
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Financial Statements reflect all liabilities and obligations of DigiTar,
accrued, contingent or otherwise known or asserted, arising out of transactions
effected or events occurring on or prior to the date hereof and prior to the
Closing. All allowances and reserves shown in the Financial Statements are
appropriate, reasonable and sufficient to provide for expenses and losses
thereby contemplated. Except as set forth in the Financial Statements, DigiTar
is not liable, upon or with respect to, or obligated in any other way to provide
funds in respect of or to guarantee or assume in any manner, any debt,
obligation or dividend of any person, corporation, association, partnership,
joint venture, trust or other entity.
(g) Title; Leased Assets.
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(i) Except for those liens related to any of the Assumed
Liabilities, DigiTar owns the Purchased Assets, and its personal property
leaseholds, free and clear of all liens, liabilities, claims, and encumbrances.
The Purchased Assets are necessary for the conduct of the Business along with
those assets to be licensed by Atlantic from DigiTar LLP concurrently with the
Closing pursuant to the License Agreement described in Exhibit 1 attached
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hereto. Schedule 1 also contains a listing of which Purchased Assets are
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leased, if any. Upon consummation of the transactions contemplated hereby,
Atlantic shall receive good, valid, and marketable title to the Purchased
Assets, and will be entitled to, subject to the receipt of all appropriate
consents, use as lessee all leased assets which are material to the operation of
the Business.
(ii) Except as set forth on Schedule 1, all tangible
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properties and assets material to the Business will be reflected in the
Financial Statements and the notes thereto. DigiTar owns or leases or otherwise
possesses a transferable right to use all of the Purchased Assets which are
material to the operation of the Business as conducted immediately before the
date of this Agreement.
(h) Material Agreements. True, correct and complete copies of the
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written Material Agreements, and true, correct and complete written descriptions
of the oral Material Agreements, if any, have heretofore been delivered to
Atlantic. The Material Agreements are in full force and effect and are valid
5
and enforceable obligations of the parties thereto in accordance with their
terms, and no defenses, off-sets or counterclaims have been asserted, nor has
DigiTar waived any rights thereunder, except as set forth herein.
(i) Patents, Trademarks and Copyrights.
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(i) Other than the IP rights to be licensed by Atlantic from
DigiTar LLP concurrent with the Closing pursuant to the License Agreement
described in Exhibit 1 attached hereto, DigiTar owns no patents, trademarks and
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other trade designations, including common law rights, copyrights, and other
intellectual property rights, if any, necessary to conduct the Business; DigiTar
possesses adequate licenses or other rights, if any, without conflict with the
rights of others (severally, a "Proprietary Right" and collectively, the
"Proprietary Rights").
(ii) No claim has been asserted by any person to the right to
use any Proprietary Right or challenging or questioning the validity or
effectiveness of any such license or agreement, and neither DigiTar, DigiTar
LLP, nor any Principal knows of any valid basis for any such claim. Each of the
Proprietary Rights is valid and subsisting, has not been canceled, abandoned or
otherwise terminated.
(iii) To the knowledge of DigiTar and DigiTar LLP no product,
activity or operation of DigiTar or DigiTar LLP infringes upon or involves, or
has resulted in the infringement of, any Proprietary Right of any other person,
corporation or other entity. No proceedings have been instituted, are pending
or, to the best knowledge of DigiTar and DigiTar LLP are threatened which
challenge the rights of DigiTar or DigiTar LLP with respect thereto. DigiTar
has not given and is not bound by any agreement of indemnification for or
regarding any Proprietary Right.
(j) No Violation. To the knowledge of DigiTar, neither the
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execution and performance of this Agreement or the agreements contemplated
hereby nor the consummation of the transactions contemplated hereby or thereby
will (a) result in a violation or breach of the Articles of Incorporation or
Bylaws of DigiTar or any agreement or other instrument under which DigiTar is
bound or to which any of the Purchased Assets are subject, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the
Purchased Assets or (b) violate any applicable law or regulation or any judgment
or order of any court or governmental agency.
(k) Consents. To the knowledge of DigiTar, and with exception of
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the US Small Business Administration and associated lenders, no authorization,
consent, approval, permit or license of, or filing with, any governmental or
public body or authority, any lender or lessor or any other person or entity is
required (i) to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement or the agreements contemplated hereby
on the part of DigiTar, DigiTar LLP, or the Principals or (ii) in connection
with the transfer of any Purchased Assets from DigiTar to Atlantic, including
but not limited to the assignment of the Assigned Contracts.
(l) Compliance with Laws and Agreements.
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(i) To the knowledge of DigiTar, it is not in violation of
any term or provision of any charter, bylaw, mortgage, indenture, contract,
agreement, instrument, judgment, decree, order, or to the knowledge of DigiTar,
any law, statute, rule, regulation or judicial or administrative decision
applicable to, or which could materially affect, DigiTar, the Purchased Assets
or the Business.
(ii) To the knowledge of DigiTar, neither DigiTar, DigiTar
LLP, nor any Principal has (i) made any payment to any person (an "Official")
employed by or affiliated with any customer, supplier, or governmental entity or
agency charged with reviewing, monitoring, or regulating any activities of
DigiTar, DigiTar LLP, or any Principal, (ii) given any personal property or real
property to any Official, (iii) sold any personal property or real property to
any Official at less than fair market value, (iv) made a political contribution
to any governmental official in violation of applicable law, or (v) otherwise
taken any action in violation of any statute, rule, or regulation prohibiting
bribes, kickbacks, or other activities that seek to wrongfully influence any
Official.
(iii) To the knowledge of DigiTar, neither DigiTar, DigiTar
LLP, nor any Principal has (i) committed any act, (ii) violated any law, or
(iii) been charged with violating any law that has restricted or impaired, or
could restrict or
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impaired, or could restrict or impair, the ability of DigiTar, DigiTar LLP, or
any Principal (or following the Closing), Atlantic to conduct the Business.
(m) Finder's Fee. DigiTar, DigiTar LLP, and the Principals have
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not incurred any obligation for any finder's, broker's or agent's fee in
connection with the transactions contemplated hereby for which Atlantic or
Global may be liable or for which a claim could be asserted against the
Purchased Assets.
(n) Claims and Proceeding. Schedule 12(o) is a complete and
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accurate list and description of all claims, actions, suits, proceedings and
investigations currently pending or, to the best knowledge of DigiTar,
threatened against DigiTar, DigiTar LLP, any Principal or the Business or any of
the properties, Purchased Assets, at law or in equity, or before or by any
court, municipal or other governmental department, commission, board, agency or
instrumentality. Except as set forth in Schedule 12(o), none of such claims,
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actions, suits, proceedings or investigations will result in any liability or
loss to DigiTar, DigiTar LLP, the Purchased Assets or the Business which
(individually or in the aggregate) is material to DigiTar, DigiTar LLP, the
Purchased Assets, or the Business and DigiTar and DigiTar LLP have not been, and
are not now, subject to any order, judgment, decree, stipulation or consent of
any court, governmental body or agency. No inquiry, action or proceeding has
been asserted, instituted or, to the best knowledge of DigiTar, DigiTar LLP, or
the Principals threatened to restrain or prohibit the carrying out of the
transactions contemplated by this Agreement or to challenge the validity of such
transactions or any part thereof or seeking damages on account thereof. To the
best knowledge of DigiTar, DigiTar LLP, and the Principals there is no basis for
any claim or action which would, or could reasonably be expected to
(individually or in the aggregate), have a material adverse effect on the
Business or financial condition of DigiTar. To the best knowledge of DigiTar,
DigiTar LLP, and the Principals no claim, complaint, suit, action, proceeding or
investigation is pending or threatened against any of the Principals or to any
other person or entity having an ownership interest in, or who was an officer,
director, or agent of DigiTar or DigiTar LLP, which may result in any restraint,
prohibition or the obtaining of damages or any other relief.
(o) Labor Matters. To the knowledge of DigiTar, it is in
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compliance with all federal and state laws respecting employment and employment
practices, terms and conditions of employment and wages and hours and is not
engaged in, nor has it committed, any unfair labor practice as defined in the
National Labor Relations Act of 1947, as amended. There is no unfair labor
practice claim against DigiTar before the National Labor Relations Board.
(p) Condition of Fixed Assets. All of the Fixed Assets owned or
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leased by DigiTar are in good condition and repair, ordinary wear and tear
excepted, and are fit for their intended use in the ordinary course of business.
(q) Books of Account and Records. The books of account of DigiTar
----------------------------
have been kept accurately in the ordinary course of the Business, and the
transactions entered therein represent bona fide transactions and the revenues,
expenses, assets and liabilities of DigiTar have been properly recorded in such
books. The records are in good order, are complete, and have been maintained in
accordance with sound business practices.
(r) Corporate Name. There are no actions, suits or proceedings
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pending, or to the best knowledge of DigiTar threatened, against or affecting
DigiTar which may result in any impairment of the right of DigiTar to use its
corporate name or the right of Atlantic to use such name following the Closing.
To knowledge of DigiTar, the use of such corporate name does not infringe the
rights of any third party nor is it confusingly similar with the corporate name
of any third party. After the Closing, no person or business entity other than
Atlantic and DigiTar LLP will be authorized, directly or indirectly, by DigiTar
to use the name DigiTar or any name confusingly similar thereto. In that
regard, Atlantic is specifically authorized to change its corporate name to
DigiTar, Inc. in the State of Nevada.
(s) Investments in Competitors. Except for the ownership of
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non-controlling interests in securities of corporations the shares of which are
listed on generally recognized stock exchanges, none of the Principals owns
directly or indirectly any interest or has any investment in any corporation,
business or other person which is a competitor of, or which otherwise directly
does business with, DigiTar or DigiTar LLP.
(t) Real Property. Schedule 12(v) describes all real estate owned
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or leased by DigiTar or otherwise occupied by DigiTar in the Business (the "Real
Property"). Except as set forth on Schedule12(v),
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DigiTar's use and operation of the Real Property and Atlantic's use of the Real
Property in the same manner as used by DigiTar are, and at the Closing will be,
valid and permitted uses of the Real Property which in no way violate any Laws
(as hereinafter defined) or any agreement, document or instrument respecting the
Real Property and do not constitute non-conforming use. All uses of the Real
Property and all uses made thereby by DigiTar have been, and as of the Closing
will be, in compliance with all federal, state, county and local laws, rules,
orders, regulations and ordinances, including without limitation, all applicable
planning and zoning laws, rules, regulations and ordinances (collectively, the
"Laws"), except for minor violations which do not and will not have a material
adverse effect on the operation of the Business. Neither DigiTar, DigiTar LLP,
a Principal, nor anyone on its or their behalf, has received any notices of any
violations of any Laws regarding the Real Property.
(u) Compliance. To the knowledge of DigiTar, DigiTar is in
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material compliance with all federal, state, county and local laws, ordinances,
codes, regulations, orders, requirements, standards and procedures which are
applicable to DigiTar, the Business or the Purchased Assets.
(v) Proprietary Information. Neither DigiTar, DigiTar LLP, nor
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any Principal (nor to the best knowledge of DigiTar and DigiTar LLP, any
employee of DigiTar or DigiTar LLP) has disclosed any confidential information
purported to be transferred hereunder or licensed by Atlantic from DigiTar LLP
in the License Agreement (including but not limited, current or prospective
customer lists, financial statements, trade secrets, methods by which the
Business is or has been conducted, and methods by which the customers or the
Business are or have been obtained) which does not exist in the public domain to
any third party except, (i) in the ordinary course of business and then under
appropriate confidentiality covenants or agreements sufficient to protect and
maintain the confidentiality and proprietary nature of such information and,
(ii) to Atlantic or its agents or representatives.
(w) Necessary Property. The Purchased Assets (including the
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Assigned Contracts) and the licensed IP constitute all of the property, rights
and agreements now used, or advisable for the conduct and operation of the
Business in the manner and to the extent presently conducted or currently
proposed to be conducted by DigiTar.
12. Indemnification by DigiTar, DigiTar LLP, and the Principals.
------------------------------------------------------------------
Subject to the terms and conditions of this Agreement, DigiTar, DigiTar LLP,
each of them hereby jointly and severally agree to indemnify, defend and hold
Atlantic, Global, harmless from and against all claims, (collectively,
"Damages"), incurred by any or all of them or assessed against the Purchased
Assets by reason of or resulting from or based upon:
(a) The inaccuracy of any representation or breach or default of
or under any warranty, covenant or agreement made by DigiTar, DigiTar LLP,
and/or the Principals in this Agreement, including, the exhibits and schedules
or in any certificate, document or other instrument delivered in connection with
the transfer or other transactions contemplated by this Agreement.
(b) Any sales, use, or similar taxes in connection with the
purchase and sale transaction contemplated by this Agreement, if any.
13. Indemnification by Global and Atlantic. Subject to the terms and
----------------------------------------
conditions of this Agreement, Global and Atlantic hereby agree to indemnify,
defend and hold DigiTar and its shareholders, officers, directors, agents,
attorneys and affiliates (defined as DigiTar and any person or entity
controlling, controlled by, or under common control with, DigiTar), and the
Principals harmless from and against all Damages asserted against or incurred by
any or all of them by reason of or resulting from or based on:
(a) The inaccuracy of any representation or breach or default of
or under any warranty, covenant or agreement made by Global or Atlantic in this
Agreement, including exhibits and schedules, or in any certificate, document, or
other instrument delivered in connection herewith or with the transfer or other
transactions contemplated by this Agreement.
(b) The failure of Atlantic to pay, perform and discharge when due
any Assumed Liabilities.
(c) Any product liability claim relating to products sold by
Atlantic.
8
(d) Any general liability claim arising out of or relating to
occurrences of any nature relating to the conduct of the Business after the
Closing.
14. Restrictions on Indemnification. No party hereto shall have
---------------------------------
liability under this Agreement arising from any intentional breach of warranty,
misrepresentation or omission unless the aggregate amount of all Damages finally
determined to arise from such breaches, misrepresentations or omissions exceeds
$50,000, and, in such event the indemnifying party shall be required to pay the
full amount of such Damages including the first $50,000 of such Damages.
15. Amendment and Waiver. No provision of this Agreement may be
----------------------
amended, modified, supplemented or waived except by an instrument in writing
executed by all of the parties hereto or, in the case of an asserted waiver,
executed by the party against which enforcement of the waiver is sought.
16. Assignment. Neither this Agreement nor any right created hereby
----------
shall be assignable by any party hereto, except by Atlantic to an affiliate as
approved by it's by Board of Directors.
17. Notice. Any notice or communication must be in writing and given
------
by depositing the same in the United States mail, addressed to the party to be
notified, postage prepaid and registered or certified with return receipt
requested, or by delivering the same in person or by facsimile or by e-mail, if
to Atlantic and Global, addressed to Xx. Xxxxxx Xxxxxxx, 000 Xxxxxxxx, Xxxxx
000, Xxxxxxx, Xxx Xxxx 00000, telephone (000) 000-0000, facsimile +1
910.270.0535, and e-mail Xxxxxxx@xxx.xxx; and if to DigiTar, DigiTar LLP, and
the Principals, addressed to Mr. Xxxx Xxxxxxxx, 00000 Xxxx Xxxxxxx Xxxxxx,
Xxxxx, Xxxxx 00000, telephone (000) 000-0000, facsimile (000) 000-0000, and
e-mail xxxxxxxxxx@xxxxxxx.xxx Any party may change its address upon 10 days
notice to the other parties.
18. Confidentiality. After the Closing (a) any party may make such
---------------
disclosures after the Closing as it reasonably considers are required by law,
but each party will notify the other parties in advance of any such disclosure
and (b) the parties may disclose this Agreement in such manner as such party
deems in the exercise of good faith necessary or appropriate.
19. Entire Agreement. This Agreement and the exhibits and schedules
-----------------
hereto supersede all prior agreements and understandings relating to the subject
matter hereof.
20. Transactional Expenses. Except as otherwise provided in this
-----------------------
Agreement, each of the parties shall each bear their respective costs and
expenses of the transactions contemplated hereby, including without limitation,
the fees and expenses of their attorneys, accountants and other advisors. The
prevailing party in any arbitration hereunder or under any agreement executed
pursuant hereto will, however, be entitled to recover its reasonable attorneys'
fees and expenses.
21. Severability. If any provision of this Agreement is held to be
------------
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom. Furthermore,
in lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement, a provision as similar in its
terms to such illegal, invalid or unenforceable provision as may be possible and
be legal, valid and enforceable.
22. Survival of Representations, Warranties and Covenants. Except as
-------------------------------------------------------
otherwise set forth in this Agreement, all representations and warranties of the
parties hereunder shall survive for three years after the Closing; provided that
there shall be no termination of any such representation or warranty as to which
a claim has been asserted prior to the termination of such survival period.
23. Dispute Resolution. In the event of any dispute, controversy or
-------------------
claim arising out of or relating to this Agreement, the parties shall try to
settle it amicably between themselves including first referring such dispute,
controversy or claim to a member of each party's Board of Directors, in the case
of a corporate party, for resolution. If the parties are unable to so settle
such dispute, controversy or claim within 30 days after such referral, then any
9
party may, by notice to the others, have it referred to their respective chief
executive officers, in the case of a corporate party, for attempted resolution
by good faith negotiations within 30 days after such notice. In the event the
parties are not able to resolve it, any party may at any time after the 30-day
period invoke the arbitration provisions of this paragraph. All arbitration
proceedings shall be conducted in accordance with the Rules of Arbitration and
Conciliation of the International Chamber of Commerce in English. All
arbitration proceedings shall be in Boise, Idaho. The party requesting
arbitration shall serve upon the other parties a demand for arbitration stating
the substance of the controversy, dispute or claim, and the contention of the
party requesting arbitration. Within 60 days after the demand, the parties shall
each select one arbitrator, which arbitrators shall together select a third
arbitrator. The three arbitrators are to act as neutral arbitrators and shall
have no past, present or anticipated future affiliation with the parties which
would unduly influence the independence of an arbitrator. The decision of the
arbitrators shall be in writing setting forth the basis therefore.
The arbitrators shall have the authority to award compensatory damages,
interest, tort damages (but not punitive or similar damages) and specific
performance and other equitable relief. The parties shall abide by the award
rendered in such arbitration proceeding, and such award may be enforced and
executed upon in any court having jurisdiction over the party against whom
enforcement of such award is sought. During such arbitration proceedings, each
party shall pay its arbitrators' fees, administration charges and related
expenses of arbitration. The losing party shall thereafter reimburse the
prevailing party for all such costs incurred in connection with such
arbitration.
24. Governing Law. This Agreement shall be governed by, and construed
--------------
in accordance with, the substantive laws of the State of Idaho without reference
or regard to the conflicts of law rules of said state. In the event a dispute
arises under this Agreement, the parties agree that the exclusive jurisdiction
and venue for the resolution of any dispute shall be state and Federal courts
located in Ada County, Idaho. Each party irrevocably submits to the
jurisdiction of the State of Idaho and waives any objection, which it may have
based upon improper venue or forum non conveniens to the conduct of any
proceeding in any such court. All parties waive personal service of any process
upon it and consents to service of process by mail.
25. Captions. The captions in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
26. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed an original, and all of which together shall constitute
one and the same instrument. A facsimile copy or a PDF copy sent electronically
of an executed counterpart of this Agreement shall be deemed to be an original.
27. Number and Gender. Whenever the context requires, references in
-------------------
this Agreement to the singular number shall include the plural, the plural
number shall include the singular and words denoting gender shall include the
masculine, feminine and neuter.
IN WITNESS WHEREOF, this Agreement has been executed in multiple
counterparts on the date first written above.
Attachments:
-----------
Schedule 1 Purchased Assets
Schedule 4 Assumed Liabilities
Schedule 12(o) Claims and Proceedings
Schedule 12(v) Real Property
Exhibit 1 License Agreement
Exhibit 2 Escrow Agreement
Exhibit 3 Registration Rights Agreements
Exhibit 4a,b,c,d Non-Compete Agreements
Exhibit 5a,b,c,d Employment Agreements
10
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT (this "Escrow Agreement") is made as of the 23 rd day
of June 2006, by and between Atlantic Seaboard, Inc ("Atlantic"), a corporation
duly organized and existing under the laws of the state of Nevada, and Global
Wataire, Inc., a publicly traded corporation, duly organized and existing under
the laws of the State of Nevada, both having their principal place of business
at 0000 Xx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0, (hereinafter
called "Global"), and DigiTar Inc., a corporation, duly organized and existing
under the laws of the State of Wyoming, having a principal place of business at
00000 Xxxx Xxxxxxx Xxxxxx, Xxxxx, XX 00000 (hereinafter called "DigiTar") and
Glast, Xxxxxxxx & Xxxxxx, P.C. 000 Xxxxxx Xxxxxx, Xxxxx 0000 Xxxxxxx, Xxxxx
00000, as escrow agent ("Escrow Agent").
PRELIMINARY STATEMENTS
Global, Atlantic and DigiTar entered into an ASSET PURCHASE AGREEMENT
AND PLAN OF REORGANIZATION , (the "Agreement"), pursuant to which Atlantic has
acquired certain assets of the DigiTar related to DigiTar's cyber security
business, which Agreement was completed as of the date hereof.
A. Under the Agreement, Atlantic acquired substantially all the assets of
DigiTar in exchange for stock in Atlantic and agreed to license certain
intellectual property from DigiTar LLP.
B. It was agreed by the parties that the immediate goal of the Agreement is to
allow Atlantic and its parent corporation, Global, to raise capital to
facilitate the growth and success of DigiTar's business and, thereby, reward
DigiTar as a co-shareholder in Atlantic. It was also agreed that the longer term
goal of the Exchange is to allow Atlantic to achieve a successful IPO in the
U.S. securities market with the same effect.
C As an inducement to enter the Agreement, Global, Atlantic's Parent company,
granted DigiTar 20 million (20,000,000) shares of the common stock of Global
(the "Escrowed Shares") to be held in escrow for the benefit of DigiTar for a
period of one year from the date of the Agreement at which time the Global
shares would pass free of escrow to DigiTar. However, if, before the end of that
one year period, Atlantic makes a filing with the U.S. Securities and Exchange
Commission to do an IPO, the shares of Global held in escrow will automatically
revert back to Global.
AGREEMENT
In consideration of the mutual covenants, obligations and agreements set forth
herein and in the Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
SECTION 1. DEPOSIT OF ESCROWED SHARES AND RELATED INSTRUMENTS.
Upon the execution hereof, Global shall deliver to the Escrow Agent:
(a) Certificates evidencing all of the Escrowed Shares; and
(b) A signed and undated stock power in substantially the form attached as
Exhibit A hereto (a "Stock Power").
All Escrowed Shares shall be delivered by the Global to the Escrow Agent free
and clear of any lien or encumbrance (other than created hereby) and Global
agrees that it will not pledge, hypothecate or otherwise encumber any Escrowed
Shares or grant any option or create any other right with respect thereto during
the term hereof. Escrow Agent agrees to hold the Escrowed Shares and the Stock
Power in accordance with the terms and conditions of this Escrow Agreement.
SECTION 2. DIVIDENDS AND OTHER DISTRIBUTIONS.
(a) All cash dividends or other distributions declared by Global on the
Escrowed Shares (other than a distribution made in connection with a liquidation
of Global or a distribution of substantially all of the assets of Global with
respect to the Escrowed Shares) (a "Cash Dividend") and payable to the
shareholders of Global of record at any time after the date hereof, shall be
payable to DigiTar, as record holder of the Escrowed Shares, and will not be
deposited with Escrow Agent.
(b) All dividends or distributions declared by Global on the Escrowed
Shares that are payable in stock or any instrument convertible into stock of
Global and payable to the shareholders of Global of record at any time after the
date hereof, shall be payable to DigiTar, as record holder of the Escrowed
Shares, and will not be deposited with Escrow Agent.
(c) If the Global declares a stock split (which shall include any stock
dividend of more than 20%) affecting the Escrowed Shares, the certificates or
other instruments relating thereto shall be immediately deposited by Global
with the Escrow Agent as additional Escrowed Shares to be held and distributed
by Escrow Agent in accordance with this Escrow Agreement and the Agreement.
(d) DigiTar shall retain all rights to vote the Escrowed Shares at any
annual or special meeting of the shareholders of Global unless and until such
shares are disposed of pursuant to Section 3(a) hereof.
SECTION 3. DISPOSITION OF ESCROWED SHARES.
The Escrowed Shares shall be delivered by the Escrow Agent as follows:
(a) Upon delivery of Notice of Completion of an effective filing of a Form
SB-2, or the equivalent, by Global or Atlantic with the U.S. Securities and
Exchange Commission dated within one year of the date of this Escrow Agreement,
the Escrowed Shares (along with the Stock Power) shall immediately be delivered
by the escrow agent to Global;
(b) If however, if the Escrow Agent does not receive a copy of the filing
described in preceding paragraph (a), the Escrow Agent shall deliver the
Escrowed Shares along with the Stock Power to DigiTar.
SECTION 5. GENERAL RIGHTS AND DUTIES OF ESCROW AGENT.
(a) Escrow Agent agrees to use its best efforts to ensure the security of
the Escrowed Shares, and Escrow Agent agrees to perform its duties hereunder
with the same degree of care exercised by Escrow Agent in connection with its
own property.
(b) Escrow Agent does not have an interest in the Escrow Shares and has
possession thereof only as escrow holder in accordance with the terms of this
Escrow Agreement. Escrow Agent acknowledges and agrees that Escrow Agent is not
a "holder" of the Escrow Shares as that term is defined under the Uniform
Commercial Code of the State of Idaho, and, as such, Escrow Agent acknowledges
and agrees that the Escrow Shares may not be subject to any existing or
hereafter filed and perfected security interests in any of the property of
Escrow Agent held by any now or hereafter existing creditors of Escrow Agent.
(c) In performing its duties hereunder, Escrow Agent shall be entitled to
rely upon (i) the service, accuracy and authenticity of any order, judgment,
certification, demand or judicial or administrative notice and (ii) any written
notice or other document delivered to Escrow Agent in connection herewith
believed by it to be genuine and correct and executed and delivered by the
appropriate party. Escrow Agent may conclusively presume that the representative
of any entity other than a natural person which is a party hereto has full power
and authority to execute any such written notice or other document and to issue
instructions to Escrow Agent on behalf of such party unless written notice to
the contrary is delivered to Escrow Agent.
(d) Escrow Agent shall not be liable for any claim, loss or other damage
resulting from (i) the performance of the respective obligations or breach of
any covenant, representation, warranty or any other promise or obligation of the
Agreement by any of the parties thereto and (ii) compliance by Escrow Agent with
any legal process, subpoena, writs, orders, judgments and decree of any court
whether issued with or without jurisdiction and whether or not consequently
vacated, modified, set aside or reversed.
(e) Each of the Parties, Global, Atlantic and DigiTar agree to indemnify
and hold harmless Escrow Agent in its capacity as such from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, reasonable expenses (including those of its outside counsel) or
disbursements of any kind whatsoever which may at any time be imposed upon,
incurred by or asserted against Escrow Agent in its capacity as such in any way
relating to or arising out of this Escrow Agreement, except to the extent
resulting from the gross negligence or willful misconduct of Escrow Agent.
(f) In the event of disagreement about the interpretation of this Escrow
Agreement, or about the rights and obligations or the propriety of any action
contemplated by Escrow Agent thereunder, Escrow Agent may, in its sole
discretion, file an action to interpleader to resolve the disagreement.
(g) Escrow Agent shall not be bound by any agreements among Global,
Atlantic and DigiTar other than by this Escrow Agreement and any other escrow
agreement to which Escrow Agent is a party with the Seller, Buyer and/or
Guarantor.
SECTION 6. NOTICES. (a) All notices, written instructions or other
documents deliverable to any of the parties hereto pursuant to the terms and
conditions of this Escrow Agreement shall be validly given when hand-delivered
or sent by a courier or express service guaranteeing overnight delivery to the
parties at the following addresses:
If to Escrow Agent: Glast, Xxxxxxxx & Xxxxxx, P.C.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
If to Atlantic or Global: 0000 Xx Xxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxx, Xxxxxx
X0X 0X0
Attn: Xx. Xxxxxx Xxxxxxx
If to DigiTar: 00000 Xxxx Xxxxxxx Xxxxxx,
Xxxxx, XX 00000
Attn: Mr. Xxxx Xxxxxxxx
The delivery of the Stock to any party hereto shall be by hand delivery or U.S.
Mail, postage prepaid, return receipt requested and copies of any correspondence
delivered therewith may be delivered in any manner authorized herein.
SECTION 7. TAX MATTERS. DigiTar agrees that it is responsible for the
payment of income taxes with respect to any dividend actually received by to it
with respect to the Escrowed Shares during the term of this Escrow Agreement.
SECTION 8. GOVERNING LAW. This Escrow Agreement shall be governed by and
construed in accordance with the laws of the State of Idaho notwithstanding the
conflict of laws principles thereof.
SECTION 9. WAIVER. No waiver of any of the obligations or provisions of
this Escrow Agreement shall be enforceable against any of the parties unless
such waiver is (a) executed by each of the parties hereto and (b) acknowledged
in writing by Escrow
Agent. Any waiver effected hereby shall not constitute a waiver of any other
obligations or provisions of this Escrow Agreement.
SECTION 10. AMENDMENT. This Escrow Agreement may be amended, modified or
terminated only by written instrument or written instruments signed by the
parties hereto. No act, omission or course of dealing shall be deemed to
constitute an amendment, modification or termination hereof.
SECTION 11. HEADINGS. The headings contained in this Escrow Agreement are
provided for convenience only and form no part of this Agreement and shall not
affect the construction or interpretation of this Escrow Agreement.
SECTION 12. SUCCESSORS AND ASSIGNS. This Escrow Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, their respective
legal representatives, successors, heirs and assigns.
SECTION 13. ENTIRE AGREEMENT. This Escrow Agreement sets forth the entire
agreement among the parties with respect to the subject matter hereof, and this
Agreement supersedes and replaces any agreement or understanding that may have
existed between the parties prior to or contemporaneously with the date hereof
in respect of the such subject matter expressly set forth herein.
SECTION 14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties have executed and delivered this Escrow
Agreement as of the date first above written.
GLOBAL WATAIRE, INC
/s/
==============================
Xxxxxx Xxxxxxx, President
ATLANTIC, INC:
/s/
==============================
Xxxxxx Xxxxxxx, President
DIGITAR, INC.
/s/
==============================
Xxxx Xxxxxxxx, President
ESCROW AGENT:
/s/
==============================
Xxxxxx X. Xxxxxxxx, Esq.
Partner
SCHEDULE C TO THE LETTER OF INTENT
----------------------------------
DIGITAR, INC.
-------------
EMPLOYEE CONFIDENTIALITY, NON-DISCLOSURE
AND NON-COMPETITION AGREEMENT
PLEASE READ THIS AGREEMENT CAREFULLY.
THIS AGREEMENT DESCRIBES THE BASIC LEGAL
AND ETHICAL RESPONSIBILITIES THAT YOU ARE REQUIRED TO OBSERVE AS AN EMPLOYEE
EXPOSED TO HIGHLY SENSITIVE TECHNOLOGY AND STRATEGIC INFORMATION.
THIS AGREEMENT AND ACKNOWLEDGEMENT, effective as of the date shown below, by and
between DigiTar, Inc. ("Employer") and you, as an employee of Employer. Employee
acknowledges that he/she is a "Principal" in Employer's predecessor company as
that term is used in that certain Letter of Intent entered as this same date
between Employer and Employee and that Employee has unique knowledge of
Employer's business and its proprietary information, as defined in the
Definitive Agreements to that Letter of Intent, and this Agreement is being
entered into as Schedule C to the that Letter of Intent.
ARTICLE 1.
SCOPE OF DUTIES
1.1. EMPLOYMENT BY EMPLOYER AS SOLE OCCUPATION. Subject only to the
exceptions provided in this Agreement, you agree to devote your full business
time, attention, skill, and effort exclusively to the performance of the duties
that Employer may assign you from time to time. You may not engage in any
business activities or render any services of a business, commercial, or
professional nature for compensation for the benefit of anyone other than
Employer, unless Employer has given its consent in writing in advance. It is the
policy of Employer never to allow its personnel to work for any competitive
enterprise during their employment, including after hours, on weekends, or
during vacation time, even if only organizational assistance or limited
consultation is involved. This Agreement does not prohibit the investment of a
reasonable part of your assets in the stock of a company whose stock is traded
on a national stock exchange.
1.2. NONINTERFERENCE WITH THIRD-PARTY RIGHTS. Employer is employing you
with the understanding that (1) you are free to enter into employment with
Employer and (2) only Employer is entitled to the benefit of your work. Employer
has no interest in using any other person's patents, copyrights, trade secrets,
or trademarks in an unlawful manner. You should be careful not to misapply
proprietary rights that Employer has no right to use.
1.3 1. Term of Employment. The Company hereby employs Employee and
Employee accepts such employment commencing on the date hereof and terminating
on the third
1
anniversary hereof, unless sooner terminated as hereinafter provided. The
faithful observance of this Agreement by you is, and shall remain, a condition
to your employment.
YOUR EMPLOYMENT IS TERMINABLE AT WILL BY EMPLOYER AT ANY TIME.
ARTICLE 2.
OWNERSHIP OF EMPLOYEE DEVELOPMENTS
2.1. EXISTING PROPRIETARY RIGHTS. The patents, patent applications,
copyrights and trademarks listed on Schedule 1, hereto, are the only intangible
interests and properties that you own, or have any claim in, at the time of
execution of this Agreement. IF EMPLOYEE OWNS ANY PATENTS, PATENT APPLICATIONS,
COPYRIGHTS OR TRADEMARKS, THEY SHOULD BE LISTED ON SCHEDULE 1 AND ATTACHED TO
THIS AGREEMENT.
2.2. OWNERSHIP OF WORK PRODUCT.
a. Employer shall own all Work Product (as defined in ARTICLE
2.2(e)). All Work Product shall be considered work made for hire by you and
owned by Employer.
b. If any of the Work Product may not, by operation of law, be
considered work made for hire by you for Employer, or if ownership of all right,
title, and interest of the intellectual property rights therein shall not
otherwise vest exclusively in Employer, you agree to assign, and upon creation
thereof automatically assign, without further consideration, the ownership of
all Trade Secrets (as defined in ARTICLE 3.2), U.S. and international
copyrights, patentable inventions, and other intellectual property rights
therein to Employer, its successors and assigns.
c. Employer, its successors and assigns, shall have the right to
obtain and hold in its or their own name copyright registrations, trademark
registrations, patents and any other protection available in the foregoing.
d. You agree to perform, upon the reasonable request of Employer,
during or after your employment, such further acts as may be necessary or
desirable to transfer, perfect, and defend Employer's ownership of the Work
Product. When requested, you will:
1. Execute, acknowledge, and deliver any requested affidavits and
documents of assignment and conveyance with respect to any Work
Product;
2. Assist in the preparation, prosecution, procurement, maintenance and
enforcement of copyrights and, if applicable, patents with respect to
the Work Product in any countries;
3. Provide testimony in connection with any proceeding affecting the
right, title, or interest of Employer in any Work Product; and
2
4. Perform any other acts deemed necessary or desirable to carry out the
purposes of this Agreement.
Employer shall reimburse all reasonable out-of-pocket expenses incurred by you
at Employer's request in connection with the foregoing, including (unless you
are otherwise being compensated at the time) a reasonable per diem or hourly fee
for services rendered following termination of your employment.
e. For purposes hereof, "Work Product" shall mean all intellectual
property rights, including all Trade Secrets, U.S. and international copyrights,
patentable inventions, discoveries and improvements, and other intellectual
property rights, in any programming, documentation, technology, or other Work
Product that relates to the business and interests of Employer and that you
conceive, develop, or deliver to Employer at any time during the term of your
employment. Work Product shall also include all intellectual property rights in
any programming, documentation, technology, or other work product that is now
contained in any of the products or systems, including development and support
systems, of Employer to the extent you conceived, developed, or delivered such
Work Product to Employer prior to the date of this Agreement while you were
engaged as an independent contractor or an employee of Employer. You hereby
irrevocably relinquish for the benefit of Employer and its assigns any moral
rights in the Work Product recognized by applicable law.
2.3. CLEARANCE PROCEDURE FOR PROPRIETARY RIGHTS NOT CLAIMED BY EMPLOYER. If
you ever wish to create or develop, on your own time and with your own
resources, anything that may be considered Work Product but to which you believe
you should be entitled to the personal benefit of, you are required to follow
the clearance procedure set forth on this ARTICLE in order to ensure that
Employer has no claim to the proprietary rights that may arise.
Before you begin any development work on your own time, you must give
Employer advance written notice of your plans and supply a description of the
development under consideration. Unless otherwise agreed in a writing signed by
Employer, Employer shall have no obligation of confidence with respect to such
description. Employer will determine, in good faith, within thirty (30) days
after you have fully disclosed your plans to Employer, whether the development
is claimed by Employer as Work Product. If Employer determines that it does not
claim such development, you will be notified in writing and may retain ownership
of the development to the extent of what has been disclosed to Employer. You
should submit for further clearance any significant improvement, modification,
or adaptation so that it can be determined whether the improvement,
modification, or adaptation relates to the business or interests of Employer.
Clearance under this procedure does not relieve you of the need to obtain
the written consent of Employer before engaging in business activities or
rendering business, commercial, or professional services for the benefit of
anyone other than Employer, as required in ARTICLE 1.1 hereof. Employer thus
reserves the right to exercise greater control over development work that you
might consider doing for profit after hours, as opposed to mere hobby work
pursued in your spare time.
3
ARTICLE 3.
CONFIDENTIALITY
3.1. CONSEQUENCES OF ENTRUSTMENT WITH SENSITIVE INFORMATION. You should
recognize that your position with Employer requires considerable responsibility
and trust. Relying on your ethical responsibility and undivided loyalty,
Employer expects to entrust you with highly sensitive confidential, restricted,
and proprietary information involving Trade Secrets (as defined in ARTICLE 3.2)
and Confidential Information (as defined in ARTICLE 3.4). You are legally and
ethically responsible for protecting and preserving Employer's proprietary
rights for use only for Employer's benefit, and these responsibilities may
impose unavoidable limitations on your ability to pursue some kinds of business
opportunities that might interest you during or after your employment.
3.2. TRADE SECRETS DEFINED. For purposes of this Agreement, a "Trade
Secret" is any information, including, but not limited to, technical or
nontechnical data, techniques relating to the preparation and production of
illustrations for use in Employer's cyber security products, source codes, flow
charts, diagrams, technical documentation, scripts, algorithms, file structures,
metadata, data definitions and principles of operation relating to or reflected
in Employer's cyber security, messaging and data packet processing services and
products, formulas, patterns, compilations, programs, devices, methods,
techniques, drawings, protocols, processes, or other information similar to the
foregoing, that: (1) derive economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from their disclosure or use; and
(2) are the subject of efforts that are reasonable under the circumstances to
maintain their secrecy. The term "Trade Secret" will not include any information
which constitutes Confidential Information (as defined in ARTICLE 3.4).
The term Trade Secret will not include information that you can show by
competent proof (i) was known to you prior to disclosure by Employer; (ii) was
generally known to the public at the time Employer disclosed the information to
you; (iii) became generally known to the public after disclosure to you by the
Employer through no act or omission of yours; or (iv) was disclosed to you by a
third party having a bona fide right both to possess the information and to
disclose the information to you.
3.3. RESTRICTIONS ON USE AND DISCLOSURE OF TRADE SECRETS. You shall hold in
confidence at all times after the date hereof all Trade Secrets of Employer and
shall not disclose, publish or make use at any time after the date hereof of
Trade Secrets without the prior consent of Employer.
3.4. CONFIDENTIAL INFORMATION DEFINED. For purposes of this Agreement,
"Confidential Information" is any financial information, financial data,
financial plans, information concerning the relationship between the Company and
its customers or suppliers, or product plans or strategies of Employer which are
valuable to Employer and not generally known or available to competitors of
Employer.
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3.5. USE OR DISCLOSURE OF CONFIDENTIAL INFORMATION. You agree that during
the term of your employment by Employer, and for a period of three (3) years
following termination of your employment, you will hold in confidence all
Confidential Information and will not disclose, publish or make use of
Confidential Information without the prior written consent of Employer.
3.6. SCREENING OF PUBLIC RELEASES OF INFORMATION. In addition, and without
any intention of limiting your other obligations under this Agreement in any
way, you should not, during your employment, reveal any non-public information
concerning the technology pertaining to the proprietary products and
manufacturing processes of Employer (particularly technology under current
development or improvement), unless you have obtained written approval from
Employer in advance. In that connection, you should submit to Employer for
review any proposed scientific and technical articles and the text of any public
speeches relating to work done for Employer before they are released or
delivered. Employer has the right to disapprove and prohibit, or delete any
parts of, such articles or speeches that might disclose Employer's Trade Secrets
or other Confidential Information or otherwise be contrary to Employer's
business interests.
3.7. EMPLOYER RIGHTS UNDER APPLICABLE TRADE SECRET LAW. Nothing in this
Agreement is intended to, nor shall it, diminish the Employer's rights regarding
the protection of Employers trade secrets pursuant to applicable Idaho Law.
ARTICLE 4.
RETURN OF MATERIALS
Upon the request of Employer and, in any event, upon the termination of
your employment, you must return to Employer and leave at its disposal all
memoranda, notes, records, drawings, manuals, computer programs, documentation,
diskettes, computer tapes, and, other documents or media pertaining to the
business of Employer or your specific duties for Employer, including all copies
of such materials. You must also return to Employer and leave at its disposal
all materials involving any Trade Secrets of Employer. This ARTICLE 4 is
intended to apply to all materials made or compiled by you, as well as to all
materials furnished to you by anyone else in connection with your employment.
ARTICLE 5.
NON-INTERFERENCE WITH PERSONNEL RELATIONS
During my employment with Employer and for a period of two (2) years
afterwards, I will not knowingly solicit, entice or persuade any other employees
of Employer or Employer's consultants to leave the services of Employer for any
reason.
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ARTICLE 6.
NON-COMPETITION AGREEMENT
6.1. DEFINITIONS. For the purposes of this ARTICLE 6, the following
definitions shall apply:
a. "Employer Activities" shall mean all activities of the type
conducted, authorized, offered, or provided by you within one year prior to
termination of your employment. For purposes of reference, such activities at
the date of this Agreement include the business of cyber security, message and
datum packet processing and message or datum packet management, message
archiving and the any other application by Employer of its Trade Secrets. The
term "Employer Activities" shall include (without limitation) the production,
marketing and cyber management services or products sold or provided by Employer
as of the date hereof or on the date of termination of your employment.
b. "Noncompete Period" or "Nonsolicitation Period" shall mean the period
beginning on the date hereof and ending on the second (2nd) anniversary of the
date of termination of your employment with Employer.
c. "Territory" shall mean the areas where you worked within one year
prior to termination of your employment and as such shall include such areas
where any Employer Activities performed, supervised, or assisted in by you were
conducted and any area where customers or actively sought prospective customers
of Employer with whom you had material contact were present. For purposes of
reference, such areas at the date of this Agreement include the United States of
America, its territories and possessions, and any countries where the Employer
has representation, customers, agreements or other business activities.
6.2. TRADE NAME. You agree that during the Noncompete Period, you shall
not, directly or by assisting others, own, manage, operate, join, control or
participate in the ownership, management, operation or control of any business
conducted using any corporate or trade name or trade xxxx of Employer or name
similar thereto without the prior written consent of Employer.
6.3. NONCOMPETITION.
a. Coverage. The parties hereto acknowledge that you conduct Employer
Activities throughout the Territory. You acknowledge that to protect adequately
the interests of Employer in the business of Employer, it is essential that any
Noncompete covenant with respect thereto cover all Employer Activities and the
entire Territory.
b. Covenant. You hereby agree that you shall not, during the
Noncompete Period, in any manner (other than as an employee of or as a
consultant to Employer), directly or by assisting others, conduct Employer
Activities in the Territory. It is specifically understood and agreed that
accepting employment with, or acting as a consultant to, any one of the
following companies during the Noncompete Period would constitute a breach of
this covenant:
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All cyber security and/or message processing enterprise including, but not
limited to: Message Labs, Postini, Symatec, Cloudmark, McAfee, Trend Micro,
Fortinet, Norton, Barracuda, Sonic Wall, or any firms with similar products or
services.
Notwithstanding the foregoing provisions of this ARTICLE 6.3 b., it is
understood and agreed that you may accept employment with, or act as a
consultant to, a company (other than a "Designated Competitor") that is engaged
in Employer Activities in the Territory, so long as you have no direct and
material responsibility for, and involvement in, products or services which
compete directly with Employer's products and services or which have, as their
primary products or services, that which could be deemed to compete directly
with Employer's products and services if they might be purchased by customers in
lieu of the products of Employer. Notwithstanding this ARTICLE 6.3(b), you shall
be permitted to (i) acquire up to five percent (5%) of any competitor of
Employer whose common stock is publicly traded on a national securities exchange
or in the over-the-counter market; or (ii) own shares of stock of Employer.
6.4. NONSOLICITATION. You hereby agree that you shall not, during the
Nonsolicitation Period, in any manner (other than as an employee of or a
consultant to Employer), directly or by assisting others:
a. solicit or attempt to solicit, any business from any of Employer's
customers, including actively sought prospective customers, with whom you had
material contact during your employment hereunder for purposes of providing
products or services that are competitive with those provided by Employer; or
b. solicit or attempt to solicit for employment, on your behalf or on
behalf of any other person, firm or corporation, any other employee of Employer
or its affiliates with whom you had material contact during your employment
hereunder.
6.5. SEVERABILITY. If a judicial determination is made that any of the
provisions of this ARTICLE 6 constitutes an unreasonable or otherwise
unenforceable restriction against you, the provisions of this ARTICLE 6 shall be
rendered void only to the extent that such judicial determination finds such
provisions to be unreasonable or otherwise unenforceable. In this regard, you
and Employer hereby agree that any judicial authority construing this Agreement
shall be empowered to sever any portion of the Territory, any prohibited
business activity or any time period from the coverage of this ARTICLE 6 and to
apply the provisions of this ARTICLE 6 to the remaining portion of the
Territory, the remaining business activities and the remaining time period not
so severed by such judicial authority. Moreover, notwithstanding the fact that
any provision of this ARTICLE 6 is determined not to be specifically
enforceable, Employer shall nevertheless be entitled to recover monetary damages
as a result of your breach of such provision. The time period during which the
prohibitions set forth in this ARTICLE 6 shall apply shall be tolled and
suspended for a period equal to the aggregate quantity of time during which you
violate such prohibitions in any respect.
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ARTICLE 7.
IMPLEMENTATION
7.1. SEVERABILITY. The covenants in this Agreement shall be construed as
covenants independent of one another and as obligations distinct from any other
contract between you and Employer. Any claim that you may have against Employer
shall not constitute a defense to enforcement by Employer of this Agreement.
7.2. SURVIVAL OF OBLIGATIONS. The covenants in ARTICLES 2 through 6 of this
Agreement shall survive the execution and delivery of this Agreement and the
termination of your employment, regardless of who causes the termination and
under what circumstances the termination occurred.
7.3. SPECIFIC PERFORMANCE AND CONSENT TO INJUNCTIVE RELIEF. The faithful
observance of all covenants in this Agreement is an essential condition to your
employment, and Employer is depending upon absolute compliance. Damages would
probably be very difficult to ascertain if you breached any covenant in this
Agreement. This Agreement is intended to protect the proprietary rights of
Employer in many important ways. Even the threat of any misuse of the technology
of Employer would be extremely harmful, since that technology is essential to
the business of Employer. In light of these facts, you agree that any court of
competent jurisdiction may immediately enjoin any breach of this Agreement upon
the request of and proper showing by Employer.
7.4. CONSTRUCTION OF AGREEMENT. No provision of this Agreement or any
related document shall be construed against or interpreted to the disadvantage
of any party hereto by any court or other government or judicial authority by
reason of such party having or being deemed to have structured or drafted such
provision.
7.5. NOTICES. All notices required under this Agreement shall be made in
writing and shall be deemed given when (1) delivered in person, (2) deposited in
the U.S. mail, first class, with proper postage prepaid and properly addressed,
or (3) sent through the interoffice delivery service of Employer, if you are
still employed by Employer at the time.
7.6. RELATED PARTIES. This Agreement shall inure to the benefit of, and be
binding upon, Employer and its subsidiaries and its affiliates, together with
their successors and assigns, and you, together with your executor,
administrator, personal representative, and legatees.
7.7. MERGER. This Agreement merges and supersedes all prior and
contemporaneous agreements, undertakings, covenants, or conditions, whether oral
or written, express or implied, to the extent that they contradict or conflict
with the terms and conditions hereof. This Agreement is not intended to modify
or impair the effectiveness of the general rules and policies Employer may
announce from time to time.
7.8. CHOICE OF LAW. This Agreement shall be governed by and enforced under
the laws of the State of Idaho.
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7.9. NO WAIVER. The waiver by either party of a breach of this Agreement
shall not operate or be construed as a waiver of any subsequent breach of this
Agreement.
7.10. HEADINGS. The ARTICLE and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, you, as an employee of Employer, have entered and
executed this Agreement under seal, and Employer has accepted your undertaking.
EMPLOYEE / PRINCIPAL:
----------------------
Signature
----------------------
Name (typed or printed)
Social Security No. - -
________________
Address:
--------------------------
--------------------------
--------------------------
EMPLOYER
DigiTar, Inc.
By:
_______________________________
Its: _______________________
Date: ______ June 2006
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SCHEDULE B TO THE LETTER 0F INTENT
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EXCLUSIVE LICENSE AGREEMENT
This License Agreement is entered into as of the __th day of June, 2006, (the
"Effective Date") by DigiTar LLP, an Idaho Limited Liability Partnership
("DigiTarLLP"), and Atlantic Seaboard, Inc., a Nevada corporation ("ATLANTIC")
(each also singularly a "Party" and collectively the "Parties") as follows:
WITNESSED:
WHEREAS, DigiTarLLP is the owner of certain patent rights and know-how relating
to the provision of Email and Web Cyber Security , Email and web content
management, messaging protocols and other know-how used in its cyber security
and cyber data traffic management service business (the "IP");
WHEREAS, ATLANTIC is acquiring the all business, assets and other property used
to conducted its business (the "Business") except the IP and ATLANTIC the wishes
to obtain an exclusive license under such IP; and
WHEREAS, DigiTarLLP is willing to grant such a license to ATLANTIC on the terms
set forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
Parties agree as follows:
ARTICLE 1.0 CERTAIN DEFINITIONS
The terms defined elsewhere in this Agreement shall have the meanings specified
herein. The following terms shall have the following meanings for purposes of
this Agreement:
1.1. "Licensed Know-how" shall mean any and all proprietary information,
methods, processes, techniques, software, data and materials which are in
the possession of or controlled by DigiTarLLP presently or hereafter during
the term of this Agreement, which DigiTarLLP is free to license or
sublicense, and which are necessary or useful for the cyber security and
messaging business; "Licensed Know-how" shall include, without limitation,
those items listed or described on Exhibit "A" attached hereto.
1.2 "Licensed Patent Rights" shall mean all patents and patent applications,
and all patents issuing there from, together with all extensions, reissues,
reexaminations, substitutions, renewals, divisions, continuations,
continuations-in-part and foreign counterparts thereof or therefore, that
are in the possession of or controlled by DigiTarLLP presently or hereafter
during the term of this Agreement, and which DigiTarLLP is free to license
or sublicense, to the extent that any of the foregoing relates to use in
the conduct of the Business; "Licensed
1
Patent Rights" shall include, without limitation, those patent applications
and patents listed on Exhibit "B", attached hereto.
1.3 "Licensed Technology" shall mean any cyber messaging/management/storage
security service that: (i) could not be provided without infringing one or
more claims of the Licensed Patent Rights or (ii) is provided, in whole or
part, through the use of Licensed Know-how.
ARTICLE 2.0 LICENSE GRANT
2.1 License Grant. Subject to the other terms and conditions of this Agreement,
DigiTarLLP hereby grants to ATLANTIC an exclusive license under the
Licensed Patent Rights and Licensed Know-how to provide the Licensed
Technology for sale any where in the world. With respect to the Licensed
Patent Rights or Licensed Know-how, ATLANTIC shall have no rights other
than the rights as granted under this Agreement.
2.2 Sub-licenses. ATLANTIC shall have no right to sublicense its rights
hereunder without the prior written consent of DigiTarLLP, which consent
may be withheld by DigiTarLLP in its sole discretion.
2.3 Royality Payments. ATLANTIC herewith agrees to pay royalties to DigiTarLLP,
for the use of the Licensed Knowhow and Licensed Patent Rights in the
Business, commencing twelve (12) months from the Date hereof at a rate of
10% of Gross Sales associated with revenues generated from the sale of
products and/or services associated with the Licensed Knowhow and/or
Licensed Patent Rights so long as ATLANTIC has rights to the License Grant.
Payments shall be made to DigiTarLLP at the end of each calander quarter
within 30 days of the closing of the given calander quarter along with a
Statement of Royality Revenues due to DigiTarLLP. This Royality payment to
DigiTarLLP is in addition to any other considerations given to DigiTar,
Inc. in other Agreements.
ARTICLE 3.0 TECHNOLOGY TRANSFER
3.1 ATLANTIC shall have the right to require DigiTarLLP, at ATLANTIC's expense,
to transfer the Licensed Technology to ATLANTIC. The Parties shall in good
faith determine the most cost-effective and timely means of effecting such
transfer.
3.2 DigiTarLLP shall provide to ATLANTIC all the relevant documents, materials,
designs, data and other information necessary for the use of the Licensed
Patents Rights and the Licensed Know-how by ATLANTIC in the Business. The
timing and method of delivery of those documents shall be determined later
based on mutual agreement by the Parties.
3.3 ATLANTIC shall not be entitled to the software source codes used in the
Licensed Technology other than those necessary to market and provide the
cyber security and electronic message and network management services of
the Business to its customers. All other matters relating to the transfer
of technology not expressly provided herein shall be agreed upon by the
Parties.
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ARTICLE 4.0 INTELLECTUAL PROPERTY RIGHTS
4.1 Ownership. DigiTarLLP shall retain title to the Licensed Know-how and
Licensed Patent Rights, including, without limitation, any Licensed
Know-how and Licensed Patent Rights developed or invented by DigiTarLLP in
the future. ATLANTIC shall grant back title to DigiTar LLP any improvements
to the Licensed Know-how or Licensed Patent Rights developed or invented
solely by ATLANTIC; provided, however, that DigiTarLLP shall grant Atlantic
an exclusive right to use any such improvements. The Parties shall use
jointly any improvements to any Licensed Know-how or Licensed Patent Rights
which are developed or invented by both Parties; provided however that
DigiTarLLP shall have all title rights and ownership to such jointly
developed or invented improvements, derivations and all extensions' of any
Licensed Know-how or Licensed Patent Rights. Designation of inventor(s) on
any patent application is a matter of law, and shall be solely within the
discretion of qualified patent counsel of DigiTarLLP and ATLANTIC to
determine in accordance with United States laws of inventorship and
competent written evidence of the Parties.
4.2 Patent Filing, Prosecution and Maintenance. During the term of this
Agreement, DigiTarLLP shall be responsible for the filing, diligent
prosecution and maintenance of all Licensed Patent Rights at ATLANTIC's
expense.
4.3 Patent Infringement
(a) If either Party learns that a third party is infringing or allegedly
infringing any Licensed Patent Rights, it shall promptly notify the other
Party thereof. The Parties shall cooperate and use reasonable efforts to
stop such alleged infringement without litigation.
(b) DigiTarLLP shall have the sole right (but not the obligation) to take
the appropriate steps to remove the infringement or alleged of Licensed
Patent Rights, including, without limitation, initiating a suit, proceeding
or other legal action.
4.4 Third Party Patent Rights. If a notice of infringement is received by, or a
suit is initiated against, either Party with respect to any Licensed
Product, the Parties shall consult in good faith regarding the best
response.
ARTICLE 5.0 REPRESENTATIONS AND WARRANTIES
5.1 Disclaimer. Except as expressly provided in this Agreement, the Parties
disclaim all other representations and warranties, express or implied,
including, without limitation, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, or NON-INFRINGEMENT.
5.2 Mutual Representations and Warranties. Each party represents and warrants
to the other Party that the representing and warranting Party, to its best
knowledge: is free to enter this Agreement and in so doing it will not
violate any other agreement to which it is party or subject.
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5.3 Representations and Warranties by DigiTarLLP. DigiTarLLP represents and
warrants to ATLANTIC that (i) it has the right to grant the license set
forth hereinabove, free from any inconsistent claims or restrictions in
favor of any third party, and (ii) the Licensed Patent Rights and Licensed
Know-how, licensed and transferred to ATLANTIC are suitable and adequate to
conduct the Business world wide.
ARTICLE 6.0 LIABILITY
6.1 Limitation of Liability. Neither Party shall be liable to the other for
indirect, incidental, special or consequential damages arising out of or
resulting from any term or condition of this Agreement or with respect to
their performance or lack thereof.
6.2 Indemnification by ATLANTIC. ATLANTIC shall indemnify, defend and hold
harmless DigiTarLLP and its directors, officers, employees, agents,
Partners and affiliates from and against all costs, claims, suits,
liabilities, expenses (including reasonable attorneys' fees) and damages
arising out of or resulting from conduct by ATLANTIC of the Business,
except to the extent that such cost, claim, suit, expense or damage arose
or resulted from any willful or negligent act or omission by DigiTarLLP.
Atlantic's indemnification obligations hereunder shall be conditioned upon
DigiTarLLP (i) giving reasonable notice to ATLANTIC of any such claim or
action, (ii) tendering the defense of such claim or action to ATLANTIC,
(iii) reasonably assisting ATLANTIC (at ATLANTIC's expense) in
investigating and defending such claim or action, and (iv) not compromising
or settling such claim or action without ATLANTIC's prior consent.
6.3 Indemnification by DigiTarLLP. DigiTarLLP shall indemnify, defend and hold
harmless ATLANTIC and its directors, officers, employees, agents and
affiliates from and against all costs, claims, suits, liabilities, expenses
(including reasonable attorneys' fees) and damages arising out of or
resulting from the use or sale by ATLANTIC of any Licensed Technology,
except to the extent that such cost, claim, suit, expense or damage arose
or resulted from any willful or negligent act or omission by ATLANTIC.
DigiTarLLP's indemnification obligations hereunder shall be conditioned
upon ATLANTIC: (i) giving reasonable notice to DigiTarLLP of any such claim
or action, (ii) tendering the defense of such claim or action to
DigiTarLLP, (iii) reasonably assisting DigiTarLLP (at DigiTarLLP's expense)
in investigating and defending such claim or action, and (iv) not
compromising or settling such claim or action without DigiTarLLP's prior
consent.
ARTICLE 7.0 TERM AND TERMINATION
7.1 Term. This Agreement shall be perpetual.
7.2 Termination for Default. Failure by either Party to comply with any of its
material obligations set forth in this Agreement shall entitle the
non-defaulting Party to give the defaulting Party a notice specifying the
nature of the default and requiring the defaulting Party to make good its
default. If such default is not cured within 30 days after such notice, the
non-defaulting Party shall be entitled, without prejudice to any of its
other rights under this Agreement or available to it at law or in equity,
to terminate this Agreement effective upon a notice of termination to the
defaulting Party.
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7.4 Unilateral Termination. ATLANTIC shall have the right to terminate this
Agreement, in its sole discretion, on twenty-four months' prior notice to
DigiTarLLP.
7.5 Effect of Termination
(a) Termination of this Agreement for any reason shall be without prejudice
to any rights which shall have accrued to the benefit of either Party prior
to such termination, and shall not relieve either Party from its
obligations which are expressly indicated to survive termination of this
Agreement.
(b) On any termination of this Agreement ATLANTIC promptly shall return to
DigiTarLLP all tangible Licensed Patent Rights, Licensed Know-how,
Confidential Information and other property owned by DigiTarLLP (whether
solely or jointly with ATLANTIC) that are in ATLANTIC's possession or
control, including, without limitation, all improvements to Licensed Patent
Rights or Licensed Know-how.
ARTICLE 8.0 GENERAL PROVISIONS
8.1 Notices. Any notice, request, delivery, demand, report, accounting,
approval or consent required or permitted to be given under this Agreement
shall be in writing and shall be deemed sufficiently given on the same day
as delivery if delivered in person or transmitted by telecopier (with
confirmed answer-back) in any case by 5:00 p.m. local time, on the next
business day if sent by overnight courier service, and in three business
days if sent by registered or certified mail, in any case addressed to the
Party to whom it is directed at its address shown below or such other
address as such Party shall have last given by notice to the other Party in
accordance with this Section:
If to DigiTarLLP, addressed to: DigiTar LLP
00000 Xxxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Xxxx Xxxxxxxx, Managing Partner
208-343-8520
If to ATLANTIC, addressed to: Atlantic Seaboard .
c/o DigiTar, Inc.
0000 Xx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0
Attn: Xxxxxx Xxxxxxx
8.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Idaho (other than its choice of
law principles).
8.3 Entire Agreement. Except for a certain Agreements between the Parties of
even date herewith, this Agreement is the entire agreement and
understanding between the Parties with respect to the subject matter
hereof, and supersedes and cancels any and all prior negotiations,
correspondence, understandings and agreements, whether written or oral,
between the Parties respecting the subject matter hereof.
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8.4 Binding Effect and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective permitted
successors and assigns, subject to the remainder of this Section 10.4. This
Agreement shall not be assignable by either Party in whole or in part
without the other Party's prior consent.
8.5 Dispute Resolution. In the event of any dispute, controversy or claim
arising out of or relating to this Agreement, the Parties shall try to
settle it amicably between themselves including first referring such
dispute, controversy or claim to a member of each Party's Board of
Directors for resolution. If the Parties are unable to so settle such
dispute, controversy or claim within 30 days after such referral, then
either Party may, by notice to the other, have it referred to their
respective chief executive officers for attempted resolution by good faith
negotiations within 30 days after such notice. In the event the chief
executive officers are not able to resolve it, either Party may at any time
after the 30-day period invoke the arbitration provisions of this Section
8.5.
All arbitration proceedings shall be conducted in accordance with the Rules
of Arbitration and Conciliation of the International Chamber of Commerce,
in English. All arbitration proceedings shall be in Boise, Idaho. The Party
requesting arbitration shall serve upon the other Party a demand for
arbitration stating the substance of the controversy, dispute or claim, and
the contention of the Party requesting arbitration. Within 60 days after
the demand, the Parties shall each select one arbitrator, which arbitrators
shall together select a third arbitrator. The three arbitrators are to act
as neutral arbitrators and shall have no past, present or anticipated
future affiliation with the Parties which would unduly influence the
independence of an arbitrator. The decision of the arbitrators shall be in
writing setting forth the basis therefore.
The arbitrators shall have the authority to award compensatory damages,
interest, tort damages (but not punitive or similar damages) and specific
performance and other equitable relief. The Parties shall abide by the
award rendered in such arbitration proceeding, and such award may be
enforced and executed upon in any court having jurisdiction over the Party
against whom enforcement of such award is sought. During such arbitration
proceedings, each Party shall pay its arbitrators' fees, administration
charges and related expenses of arbitration. The losing Party shall
thereafter reimburse the prevailing Party for all such costs incurred in
connection with such arbitration.
8.6 Waiver. The waiver by either Party of any breach of or default under any of
the provisions of this Agreement or the failure of either Party to enforce
any of the provisions of this Agreement or to exercise any right thereunder
shall not be construed as a waiver of any other breach or default or a
waiver of any such rights or provisions hereunder.
8.7 Severability. If any part of this Agreement shall be held invalid, illegal
or unenforceable by any court of authority having jurisdiction over this
Agreement or either Party, such part shall be ineffective only to the
extent of such invalidity, illegality or unenforceability, and shall be
validly reformed by addition or deletion of wording as appropriate to avoid
such result and as nearly as possible approximate the intent of the
Parties. If unreformable, this Agreement shall be divisible and deleted in
such jurisdiction, but elsewhere shall not be affected.
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8.8 Publicity. ATLANTIC and DigiTarLLP shall consult and obtain mutual consent
before making any public announcement concerning this Agreement, the
subject matter hereof or use of the other Party's name, except for
information that is already in the public domain or where the nature of
such information has been previously approved for disclosure (in which case
this Section 8.8 will no longer apply to that previously approved
information).
8.9 Counterparts. This Agreement may be executed in two counterparts, each of
which shall be deemed an original for all purposes, but both of which
together shall constitute one and the same instrument.
8.10 No Other Rights. No rights or licenses express or implied, are granted to
ATLANTIC by this Agreement to use in any manner any trade name or trademark
of DigiTarLLP, or any other intellectual property not expressly covered by
this Agreement.
8.11 Force Majeure. Neither Party shall be liable to the other for loss or
damages or shall have any right to terminate this Agreement (except as
otherwise provided in this Agreement) for any default or delay of the other
Party in its performance under this Agreement that is attributable to an
act of God, flood, fire, explosion, strike, lockout, labor dispute,
casualty or accident, war, revolution, civil commotion, act of public
enemies, blockage or embargo, injunction, law, order, proclamation,
regulation, ordinance, demand or requirement of any government or
subdivision, authority or representative of any such government, or any
other cause beyond the reasonable control of the affected Party, if the
Party affected shall give prompt notice of any such cause to the other
Party. The Party giving such notice shall thereupon be excused from such of
its obligations hereunder for the period of time that it is so disabled.
8.12 Headings. Headings are for the convenience of reference only and shall not
control the construction or interpretation of any of the provisions of this
Agreement.
8.13 No Partnership. Nothing in this Agreement is intended or shall be deemed to
constitute a partnership, agency, employer-employee, or joint venture
relationship between the Parties. Neither Party shall incur any debts or
make any commitments for the other Party.
8.14 Modification. Any modification to this Agreement shall be made in writing
duly signed by both Parties.
IN WITNESS WHEREOF, the Parties each have caused this Agreement to be duly
executed by its duly authorized representative as of the date set forth above.
DIGITAR LLP SEABOARD ATLANTIC, INC.
By: ______________________ By: ______________________
Name: Xxxx Xxxxxxxx Name: Xx. Xxxxxx Xxxxxxx
Title: Managing Partner Title: President
7
EXHIBIT A
LICENSED KNOW-HOW
DigiTarLLP will provide to ATLANTIC all necessary know-how to:
ESTRANDS(TM): DigiTar LLP Proprietary DNA Genetic Algorithm based Identification
Technology;
-eStrands(TM) Deep Contextual Analysis;
ISTAT(TM): DigiTar Real Time Message DNA Content Analysis Engine;
-iStat(TM) Proprietary Content DNA Recognition Technology;
-iStat(TM) Dynamic Spam Trend Alignment(TM) (DSTA(TM)) Technology;
SENTINEL MESSAGING(TM): In-the-Cloud Real Time Cyber Threat Protection;
-Layered Threat Vectors Protection;
-Complete Content Inspection [In/Out Bound];
-Dynamic Segmented Pipeline Architecture;
-Real Time Data Packet processing [SMTP/HTTP];
-Pan Protocol AV Scanning;
-Recursive User Auto-Provisioning;
-Adaptive User Training Algorithms;
-Remote Secure Personal User Quarantine Architecture;
-Fail-Safe Message Management Architecture;
-Distributed Denial of Service (DDoS) Protection;
-Real Time Cleansing/Alignment of Network Traffic;
-Remote Management Client
8
EXHIBIT B
LICENSED PATENT RIGHTS
There are no issued patents or patent applications filed relating to the
Licensed Patent Rights as of the date of execution of the License Agreement.
9
EXIHIBIT B TO THE
ASSET PURCHASE AGREEMENT
AND PLAN OF REORGANIZATION
--------------------------
REGISTRATION RIGHTS AGREEMENT
BETWEEN ATLANTIC AND DIGITAR
THIS AGREEMENT is made as of the 23 rd day of June 2006, by and between
Atlantic Seaboard, Inc ("Atlantic"), a corporation duly organized and existing
under the laws of the State of Nevada, having their principal place of business
at 0000 Xx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0, and DigiTar Inc.,
a corporation, duly organized and existing under the laws of the State of
Wyoming, having a principal place of business at 00000 Xxxx Xxxxxxx Xxxxxx,
Xxxxx, XX 00000 (hereinafter called "DigiTar").
RECITALS
A. As of the date of this Agreement, DigiTar holds shares of common stock
and convertible preferred stock convertible into common stock of Atlantic (both
classes of stock referred to as the "Atlantic Common Stock").
B. Atlantic and DigiTar wish to establish an arrangement whereby, under
certain circumstances, DigiTar can effect an orderly distribution of the shares
of Atlantic Common Stock owned by DigiTar.
C. The Board of Directors of Atlantic has determined that it is in the best
interests of Atlantic and its shareholder DigiTar to enter into this Agreement:
and,
D. The Board of Directors of DigiTar have determined that it is in its best
interest to enter into this Agreement.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following terms
shall have the following respective meanings:
(a) "Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.
(b) "Effective Time" shall mean the date on which the Commission
declares the Registration Statement effective or on which the Registration
Statement otherwise becomes effective.
(c) "Exchange Act" shall mean the Securities Exchange Act of 1934, or
any successor thereto, as the same shall be amended from time to time.
(d) "DigiTar's Requisite Information" shall have the meaning set forth
in Section 3(h) hereof.
(e) "person" means, where applicable, an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.
(f) "Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act), as
amended or supplemented by any prospectus supplement.
(g) "Atlantic Common Stock" shall have the meaning set forth in the
recitals to this Agreement.
(h) "Register." The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or ordering
of the effectiveness of such registration statement by the Commission.
(i) "Registrable Securities" means (i) shares of Atlantic Common held
by DigiTar as of the date of this Agreement and (ii) any other securities
issuable in respect of the shares of Atlantic Common (including, without
limitation, by reason of a stock split, stock dividend, recapitalization,
merger, consolidation or similar event). Notwithstanding the foregoing, shares
of Atlantic Common Stock and such other securities shall only be treated as
Registrable Securities if and so long as they have not been sold to or through a
broker or dealer or underwriter in a public distribution or a sale pursuant to
Rule 144 or Rule 145.
(j) "Registration Expenses" shall mean all expenses, except as
otherwise stated below, incurred by Atlantic and/or DigiTar in complying with
Sections 2 and 3 hereof, including, without limitation, the registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel and accountants for Atlantic and/or DigiTar, blue sky
fees and expenses and all internal expenses of Atlantic and/or DigiTar
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties).
(k) "Registration Statement" shall mean the registration statement of
Atlantic filed with the Commission which covers the Registrable Securities on an
appropriate form, XX-0, X-0, etc., under the Securities Act, together with all
amendments and supplements to such registration statement, including
post-effective amendments, including any Prospectus contained therein, all
exhibits thereto and all material incorporated by reference into the
registration statement, all amendments and supplements and the Prospectus.
(l) "Securities Act" shall mean the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
(m) "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the Registrable Securities.
(n) "Underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof.
2. Atlantic Registration.
(a) Notice of Registration. If at any time or from time to time
Atlantic shall determine to register any of its equity securities, either for
its own account or the account of DigiTar, other than (x) a registration
relating solely to employee benefits plans, or (y) a registration relating
solely to a Rule 145 transaction, Atlantic will:
(1) promptly give to DigiTar written notice thereof; and
(2) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request by
DigiTar made within ten (10) business days after receipt of such written notice
from Atlantic.
(b) Underwriting. If the registration of which Atlantic gives notice
is for a registered public offering involving an underwriting, Atlantic shall so
advise DigiTar as a part of the written notice given pursuant to Section 2(a).
In such event, the right of DigiTar to registration pursuant to this Section 2
shall be conditioned upon DigiTar's participation in such underwriting and the
inclusion of Registrable Securities in the underwriting to the extent provided
herein. In such event, DigiTar shall (together with Atlantic distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the Underwriters selected for such underwriting by Atlantic.
Notwithstanding any other provision of this Section 2, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the managing underwriter may limit the Registrable
Securities to be included in such registration. Atlantic shall so advise DigiTar
and through such underwriting and the number of shares of Registrable Securities
that may be included in the registration and underwriting shall be reduced to an
amount reasonably acceptable to the managing underwriter. If DigiTar disapproves
of the terms of any such underwriting, it may elect to withdraw therefrom by
written notice to Atlantic and the managing underwriter.
(c) Right to Terminate Registration. Atlantic shall have the right to
terminate or withdraw any registration initiated by it pursuant to Section 2
prior to the effectiveness of such registration whether or not the DigiTar has
elected previously to include securities in such registration.
3. Registration Procedures. In connection with the Registration Statement,
the following provisions shall apply:
(a) Atlantic shall, if necessary, supplement or make amendments to the
Registration Statement, if required by the rules, regulations or instructions
applicable to the registration form used by Atlantic for the Registration
Statement or by the Securities Act or the rules or regulations thereunder.
(b) Atlantic shall take such action as may be necessary so that (i)
the Registration Statement, and any amendment thereto, and any
Prospectus forming apart thereof, and any amendment or supplement thereto (and
each report or other document incorporated therein by reference in each case)
complies in all material respects with the Securities Act and the Exchange Act
and the respective rules and regulations thereunder, (ii) the Registration
Statement, and any amendment thereto, does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading and
(iii) any Prospectus forming part of the Registration Statement, and any
amendment or supplement to such Prospectus, does not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements, in the light of the circumstances under which they were made,
not misleading.
(c) Atlantic shall advise DigiTar and, if requested by the DigiTar,
confirm such advice in writing:
(i) when the Registration Statement, and any amendment thereto,
has been filed with the Commission and when the Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of the issuance by the Commission of any stop order
suspending effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose; and
(iii) of the receipt by Atlantic of any notification with respect
to the suspension of the qualification of the securities included in the
Registration Statement therein for sale in any jurisdiction or the initiation of
any proceeding for such purpose.
(d) Atlantic shall use its reasonable efforts to prevent the issuance,
and, if issued, to obtain the withdrawal, of any order suspending the
effectiveness of the Registration Statement at the earliest possible time.
(e) Atlantic shall furnish, forthwith, to DigiTar at least one copy of
the Registration Statement and any post-effective amendments thereto, including
financial statements and schedules contained therein.
(f) Atlantic shall register or qualify or cooperate with the DigiTar
in connection with the registration or qualification of the Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions in the United States as DigiTar may reasonably request in writing
and do any and all other acts or things necessary or advisable to enable the
offer and sale in such jurisdictions of the Registrable Securities covered by
the Registration Statement; provided, however, that in no event shall Atlantic
be obligated to (i) qualify generally to do business or as a foreign corporation
or as a dealer in securities in any jurisdiction where it would not otherwise be
required to so qualify but for this Section 3(f), (ii) file any general consent
to service of process in any jurisdiction where it is not as of the date hereof
then so subject or (iii) subject itself to taxation in any such jurisdiction if
it is not so subject.
(g) Atlantic may require DigiTar to furnish to Atlantic such
information regarding DigiTar (which shall not include information regarding
Atlantic required to be included by Atlantic in the Registration Statement) and
the distribution by DigiTar of such Registrable Securities as is required by law
to be disclosed in the Registration Statement (the "DigiTar's Requisite
Information").
(h) Atlantic will use its best efforts to cause the Registrable
Securities to be listed on the OTCBB or other national stock exchange for which
it may qualify.
(i) Atlantic shall deliver to DigiTar as many copies of the Prospectus
(including each preliminary prospectus) included in the Registration Statement
and any amendment or supplement thereto as DigiTar may reasonably request, and
Atlantic consents (except upon and during the continuance of any event described
in Section 3(c)(ii) or (iii)) to the use of the Prospectus or any amendment or
supplement thereto by DigiTar in connection with the offering and sale or
delivery of the Registrable Securities covered by the Prospectus or any
amendment or supplement thereto pursuant to the Registration Statement.
4. Registration Expenses. All Registration Expenses incident to Atlantic
and/or DigiTar's performance of or compliance with this Agreement shall be paid
by Atlantic.
5. Additional Covenants of Atlantic. Atlantic agrees with the DigiTar that,
with a view to making available the benefits of certain rules and regulations of
the Commission which may at any time permit the sale of the Registrable
Securities to the public without registration, Atlantic will use its reasonable
efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date on which the Atlantic becomes subject to the reporting
requirements of the Securities Act or the Exchange Act, or any similar federal
statute and the rules and regulations promulgated thereunder, all as the same
shall be in effect at the time;
(b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of Atlantic under the Securities
Act and the Exchange Act; and
(c) So long as DigiTar owns any Registrable Securities, to furnish to
DigiTar, forthwith, a written statement by Atlantic as to its compliance with
the reporting requirements of said Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of Atlantic
and such other reports and documents of Atlantic and other information in the
possession of or reasonably obtainable by Atlantic as DigiTar may reasonably
request in availing itself of any rule or regulation of the Commission allowing
DigiTar to sell any such securities without registration.
6. Representations and Warranties of DigiTar. DigiTar represents and
warrants to Atlantic that this Agreement has been duly authorized, executed and
delivered by the DigiTar.
7. Indemnification.
(a) Indemnification by Atlantic. Atlantic shall, and it hereby agrees
to, indemnify and hold harmless DigiTar, each person, if any, who controls
DigiTar within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act and each of their respective directors, officers, employees,
trustees and agents (collectively, "DigiTar's Indemnified Parties"), against any
losses, claims, damages or liabilities, joint or several, to which DigiTar's
Indemnified Parties may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
preliminary, final or summary Prospectus contained therein or furnished by
Atlantic to DigiTar, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and Atlantic shall, and it hereby agrees to, reimburse DigiTar's
Indemnified Parties for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the indemnity agreement contained
in this Section 7(a) shall not apply to amounts paid in settlement of any such
losses, claims, damages or liabilities if such settlement is effected without
the consent of Atlantic (which consent shall not be unreasonably withheld);
provided, further, that, in the case of DigiTar, Atlantic shall not be liable to
any such person in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, or preliminary, final or summary prospectus, or amendment or
supplement in reliance upon and in conformity with written information furnished
to Atlantic by such person expressly for use therein; provided, further, that,
Atlantic shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus if (i) DigiTar failed to send or deliver a copy of
the Prospectus with or prior to the delivery of written confirmation of the sale
of Registrable Securities and (ii) the Prospectus corrected such untrue
statement or omission; and provided, further, Atlantic shall not be liable to
the extent that any such loss, claim, damage, liability or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission in the Prospectus, if such untrue statement or alleged untrue
statement, omission, or alleged omission is corrected in an amendment or
supplement to the Prospectus and if having previously been furnished by or on
behalf of DigiTar with copies of the Prospectus as so amended or supplemented,
DigiTar thereafter fail to deliver such Prospectus as so amended or supplemented
prior to or concurrently with the sale of Registrable Securities to the person
asserting such loss, claim, damage, liability or expense who purchased such
Registrable Securities which is the subject thereof from DigiTar.
(b) Indemnification by DigiTar. DigiTar shall indemnify and hold
harmless Atlantic and each person, if any, who controls Atlantic within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
and each of their respective directors, officer, employees, trustees and agents
(collectively, the "Atlantic Indemnified Parties") against any losses, claims,
damages or liabilities to which the Atlantic Indemnified Parties may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any preliminary, final or summary
Prospectus contained therein or furnished by Atlantic to DigiTar, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to Atlantic by DigiTar
expressly for use therein, and DigiTar shall, and hereby agree to, reimburse the
Atlantic Indemnified Parties for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such action or claim
as such expenses are incurred; provided, however, that the indemnity agreement
contained in this Section 7(b) shall not apply to amounts paid in settlement of
any
such losses, claims, damages or liabilities if such settlement is effected
without the consent of DigiTar (which consent shall not be unreasonably
withheld). Notwithstanding the provisions of this Section 7(b), DigiTar shall
not be liable to Atlantic Indemnified Parties pursuant to Section 7(b) in an
amount in excess of the proceeds received by it from the sale of the Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) registered by the Registration Statement.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under Section 7(a) or 7(b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 7, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Section 7(a) or 7(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, such indemnifying party shall not be
liable to such indemnified party for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation.
(d) The indemnification provided for under this Agreement shall remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and shall survive the transfer of securities.
9. Miscellaneous.
(a) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(b) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of Atlantic and DigiTar.
(c) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. DigiTar's rights pursuant to this Agreement may not
be assigned without the prior written consent of Atlantic.
(d) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(e) Counterparts. This Agreement may be executed simultaneously in two
or more counterparts (including by means of telecopied signature pages), any one
of which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same Agreement.
(f) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(g) Governing Law. All issues and questions concerning the
construction, validity, interpretation and enforcement of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Nevada, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of Nevada or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Nevada.
(h) Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given upon receipt or, if earlier, (i) five
(5) days after deposit with the U.S. Postal Service or other applicable postal
service, if delivered by first class mail, postage prepaid, (ii) upon delivery,
if delivered by hand, (iii) one business day after the business day of deposit
with Federal Express or similar overnight courier, freight prepaid or (iv) one
business day after the business day of facsimile transmission, if delivered by
facsimile transmission with copy by first class mail, postage prepaid, and shall
be addressed as follows, or at such other address as a party may designate by
ten (10) days' advance written notice to the other parties to this Agreement
pursuant to the provisions of this Section 9:
If to DigiTar, addressed to: DigiTar, Inc.
00000 Xxxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Xxxx Xxxxxxxx, CEO
208-343-8520
If to ATLANTIC, addressed to: Atlantic Seaboard, Inc
c/o DigiTar, Inc.
0000 Xx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0
Attn: Xxxxxx Xxxxxxx
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
DIGITAR, INC. SEABOARD ATLANIC, INC.
By: __________________________ By:________________________________
Name: Xxxx Xxxxxxxx, President Name: Xx. Xxxxxx Xxxxxxx, President
STOCK POWER
-----------
For Value Received, Global Wataire, Inc., hereby sells, assigns, and transfers
unto DigiTar, Inc, 00000 Xxxx Xxxxxxx Xxxxxx, Xxxxx, XX 00000:
Twenty Million (20,000,000) common shares of the Capital Stock of Global
Wataire, Inc standing as treasury stock on the books of said represented by
Certificate(s) No.________________________ herewith, and do hereby irrevocably
constitute and appoint;
--------------------------------------------------------------------------------
Attorney, to transfer the said stock on the books of the within named Company
with full power of substitution in the premises.
Signed ___________________________________________ Dated
Name/Title: Xxxxxx Xxxxxxx, President, Global Wataire, Inc.
In Presence of _____________________________________
NOTICE: The signature(s) to this assignment must correspond with the name as
written upon the face of the certificate, in every particular, without
alteration, or any change whatever, and must be guaranteed by a commercial bank,
trust company, or member firm of the Boston, New York, or Midwest Stock
Exchange.
