EXHIBIT 10.8
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
This Amended and Restated Asset Purchase Agreement (the "Agreement") is
made effective as of October 1, 1999, by and between X-10 (USA) Inc., a New
Jersey corporation (the "Seller") and X10 Wireless Technology, Inc., a Delaware
corporation (the "Buyer").
Recitals
A. Seller is the owner of certain assets used in connection with the
marketing and selling of home and small office networking products over the
Internet, and desires to sell to Buyer those assets described below, pursuant to
the terms and conditions of this Agreement;
B. Buyer desires to purchase from Seller such assets described below,
pursuant to the terms and conditions of this Agreement.
C. Seller is engaged in the business of marketing, selling and
distributing home and small office networking products to dealers, installers
and retail stores;
D. Buyer and Seller have previously entered into that certain Asset
Purchase Agreement dated as of October 1, 1999 pursuant to which Seller sold and
assigned to Buyer certain Internet URLs, customer and vendor lists, other
intangible assets and intellectual property rights related to marketing and
selling home and small office networking products;
E. The Asset Purchase Agreement did not fully set forth the entire
understanding between the parties with respect to Internet URLs, customer and
vendor lists, intangible assets and intellectual property rights transferred
under the Asset Purchase Agreement; and
F. The parties now wish to amend and restate the Asset Purchase Agreement
in order to clarify and memorialize the correct understanding of the parties
with respect to the technology, intellectual property rights and products
transferred under the Asset Purchase Agreement and to further describe the
obligations of the parties in connection therewith.
AGREEMENT
In consideration of the foregoing, the mutual covenants and conditions
contained in this Agreement and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties agree as follows:
1. Purchase and Sale of Assets. Seller hereby irrevocably sells,
assigns, transfers and conveys to Buyer all right, title and interest in and to
all of Seller's assets that Seller uses or has used in conducting its business
of marketing, selling and distributing home and small office networking products
on the Internet including, without limitation, the assets described in Exhibit A
attached hereto and all applicable intellectual property rights, on a worldwide
basis, related thereto, including, without limitation, copyrights, trademarks,
trade secrets, patents, patent applications, moral rights, contract and
licensing rights (the "Property"). In consideration of such transfer of the
Property, Buyer previously has delivered to Seller a promissory note in the
principal amount of One Million Twenty-Four Thousand Three Hundred Dollars
($1,024,300) (the "Note"). In addition, Buyer has assumed certain of Seller's
liabilities set forth in Exhibit B attached hereto for which Seller has executed
a promissory note in the principal amount of One Million Two Hundred Twenty Four
Thousand One Hundred Ninety Eight Dollars and
Fifty Three Cents ($1,224,198.53) (the "USA Note"). Seller hereby acknowledges
that it retains no right to use the Property and agrees not to challenge the
validity of Buyer's ownership of the Property.
2. Excluded Assets. Seller will retain all of its assets not expressly
transferred hereby.
3. Further Assistance. Upon each request by Buyer, without additional
consideration, Seller agrees to promptly execute documents, testify and take
other acts as Buyer may deem necessary or desirable to procure, maintain,
perfect, and enforce the full benefits, enjoyment, rights, title and interest,
on a worldwide basis of the Property sold and assigned hereunder, and render all
necessary assistance in making application for and obtaining original,
divisional, renewal, or reissued utility and design patents, copyrights, mask
works, trademarks, trade secrets, and all other technology and intellectual
property rights throughout the world related to any of the Property, in the
Buyer's name and for its benefit. In addition, Seller shall render to Buyer all
assistance necessary to transfer the registration of the URLs included in the
property into the name of Buyer. Seller hereby assigns to Buyer any and all
claims, of any nature whatsoever, which Seller now has or may hereafter have for
infringement of any Property assigned hereunder and agrees to cooperate with
Buyer in the bringing of any claim for infringement of any Property assigned
hereunder.
4. Delivery. Seller further agrees to deliver to Buyer upon execution of
this Agreement any and all tangible manifestations of the Property, including,
without limitation, all notes, records, files and tangible items of any sort in
its possession or under its control relating to the Property. Such delivery
shall include all present and predecessor versions. In addition, Seller agrees
to provide to Buyer from and after the execution of this Agreement and at the
expense of Buyer competent and knowledgeable assistance to facilitate the
transfer of all information, know-how, techniques, processes and the like
related to such tangible manifestation and otherwise comprising the intangible
aspects of the Property.
5. Liabilities and Accounts Payable. BUYER EXPRESSLY DOES NOT ASSUME ANY
LIABILITY OR OBLIGATION OF SELLER OF ANY KIND OR NATURE, HOWEVER OR WHENEVER
ARISING, except as set forth in Exhibit B. Except as set forth in Exhibit B,
Seller shall be responsible for paying all creditors of Seller, whether general
or secured and whether contingent or disputed, and all accounts payable that
arise prior to closing, whether or not any such obligations relate to Property
purchased by Buyer.
6. Closing Items. On or before closing, Buyer has delivered to Seller
the Note, and Seller has delivered to Buyer the following:
a. a Xxxx of Sale in the form attached hereto as Exhibit C, duly
executed and acknowledged by Seller, conveying to Buyer all of the Property with
warranties that the Property is free and clear of any claim, lien, encumbrance,
or security interest;
b. an Assignment of Domain Name, sufficient to convey to Buyer all
of Seller's right, title and interest in and to all Internet URLs, domain and
website names, addresses and registrations included in the Property, duly
executed and acknowledged by Seller;
c. all of the tangible assets that are part of the Property,
including, without limitation, all tangible assets described on Exhibit A; and
d. the USA Note.
7. Closing Expenses. Except as otherwise provided herein, and whether or
not the transactions contemplated hereby are consummated, each party hereto
shall pay its own expenses incident to
2.
this Agreement and the transactions contemplated hereby including, without
limitation, all legal and accounting fees and disbursements. Any personal
property taxes on the Property will be prorated as of Closing. Any sales, use,
transfer or excise taxes shall be borne and paid by Seller.
8. Representations and Warranties of Seller. Seller represents,
warrants, and agrees as follows:
a. Organization and Authorization. Seller is a corporation duly
organized and validly existing under the laws of the State of New Jersey. X10
Ltd., a Bermuda corporation, is the sole owner of all of the issued and
outstanding capital stock of the Seller. The execution, delivery and
performance of this Agreement by Seller and consummation of the transactions
contemplated hereby have been duly and effectively authorized by the Board of
Directors and sole shareholder of the Seller.
b. Title and Condition of Property. Seller has good and marketable
title to all the Property free and clear of all liens, security interests and
encumbrances. Seller has not infringed and the Property does not infringe any
patent, trademark, trade name right, copyright, trade secret or other
intellectual property right of any third party. All tangible assets included in
the Property are in good operating condition and fit for use in the ordinary
course of Buyer's business.
c. Contracts and Commitments. Except as otherwise disclosed to
Buyer in writing prior to the effective date of this Agreement:
(i) no purchase commitment by Seller relating to the Property
is outstanding;
(ii) Seller has no outstanding contracts, leases, undertakings,
indebtedness, liabilities or commitments relating to the Property;
(iii) Seller has no outstanding bid, sale, or service proposal
relating to the Property, except as previously disclosed in writing to Buyer;
(iv) all of Seller's contracts and undertakings relating to the
Property are in full force and effect, and no default exists, and no event has
occurred which with notice or lapse of time will if not cured constitute a
default; and
(v) Seller has no outstanding contracts with officers,
employees, agents, consultants, advisors, salespersons, sales representatives,
suppliers, customers, licensees, licensors, distributors, dealers or franchisees
or any of its affiliates (other than Buyer) relating to the Property.
d. No Breach. Neither execution and delivery of this Agreement nor
compliance with its terms and provisions by Seller will (with or without notice
or the passage of time) breach any statute or regulation or will conflict with
or result in a breach of or default under any agreement or instrument to which
Seller is a party or by which Seller is bound, or result in any lien, charge,
encumbrance or restriction on any of the Property or give to others any interest
or right, including right of termination or cancellation with respect to any
portion of the Property.
e. No Litigation or Adverse Event. There is no suit, action or
legal, administrative, arbitration or other proceeding or governmental matter or
investigation pending or threatened against Seller or against any part or
portion of the Property. Seller is not in default with respect to any permit,
license, or court order issued by any court or federal, state, local, or other
governmental department, commission board, agency, or instrumentality with
respect to the Property.
3.
f. Tax Returns and Payment. All tax returns and reports of Seller
required by law to be filed under the laws of any jurisdiction, domestic or
foreign, have been duly and timely filed, and all taxes, fees or other
government charges of any nature have been paid or provided for in the Financial
Statements. There are no taxes or assessments of deficiency or any additional
taxes or other governmental charges with respect to Seller which are due and
payable on the date of this Agreement or which will be due and payable or
overdue on Closing or due after Closing with respect to operations prior to
Closing or with respect to this transaction.
g. No Infringement. Seller further represents and warrants that no
claim, whether or not embodied in an action past or present, of any
infringement, of any conflict with, or of any violation of any patent,
copyright, trademark, trade secret or other intellectual property right or
similar right of any third party, has been made or is pending or threatened
against Seller with respect to the Property. Seller agrees to promptly inform
Buyer of any such claim arising or threatened in the future with respect to the
Property or any part thereof.
9. Representations and Warranties of Buyer. Buyer represents and
warrants that Buyer is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware, and that the execution,
delivery and performance of this Agreement by the Buyer and consummation of the
transactions contemplated hereby have been or will be authorized by the Board of
Directors of Buyer at or before the Closing.
10. Survival of Warranties. The representations and warranties of each
party to this Agreement will survive the Closing and will be true on and as of
the Closing.
11. Conditions Precedent to Buyer's Obligations. Each obligation of Buyer
to be performed at the Closing is subject to fulfillment of the following
conditions on or prior to the Closing, any one or more of which may be waived in
writing by Buyer:
a. Truth of Representations. The representations and warranties
made by Seller in this Agreement shall be true on and as of the Closing with the
same effect as if made at the Closing.
b. No Material Change. The Property shall not have been materially
changed or affected by any act, omission, casualty, or event.
c. Compliance. Seller shall have performed and complied with all of
its obligations under this Agreement to be performed at or prior to the Closing.
12. Obligations to Employees and Former Employees. Except as specifically
set forth in Exhibit B, Buyer assumes no obligation to any employee or former
employee of Seller, and shall have no obligation to credit any employees of
Seller who become employees of Buyer at or after the Closing with time spent as
employees of Seller.
13. Existing Orders. Seller will continue to be responsible for
fulfillment of any existing orders received by Seller prior to Closing. Buyer
assumes no obligation to fulfill any such orders.
14. Warranty Claims. Buyer shall be responsible for responding to and
satisfying any warranty claims made after Closing by customers who purchased
products from Seller through an Internet purchase prior to Closing. Except to
the extent of such warranty claims, Buyer assumes no obligation, and Seller
shall be solely responsible for any claims or liabilities in connection with the
sale of products by Seller prior to Closing.
4.
15. Indemnification.
a. Seller's Indemnity. Seller shall indemnify, defend and save
harmless the Buyer, its transferees, successors and assigns and its partners,
agents, employees and contractors, following the Closing hereunder, from and
against (1) any and all liabilities, claims, liens or encumbrances, whether
direct, contingent or consequential, arising out of Seller's use of the Property
on or prior to Closing, excluding only Buyer's own wrongful or negligent acts or
omissions; (2) any loss or damage to Buyer arising from any breach of any
representation or warranty or default of any covenant or agreement of Seller
under this Agreement; (3) any misrepresentation, breach of warranty, or
nonperformance of any obligation or nonfulfillment of any condition on the part
of Seller under this Agreement, (4) any claims, liabilities or damages relating
to taxes that may be levied on Buyer that arise primarily as a result of
Seller's conduct of its business and (5) all costs and expenses, including court
costs and reasonable attorneys' fees, related to any actions, suits or judgments
incident to any of the foregoing.
b. Buyer's Indemnity. Buyer shall indemnify, defend and save
harmless the Seller, its successors and assigns and its partners, agents,
employees and contractors, following the Closing hereunder, from (1) any and all
liabilities, claims, liens or encumbrances, whether direct, contingent or
consequential, arising out of Buyer's use of the Property after the Closing,
excluding only Seller's own wrongful or negligent acts or omissions, (2) any
loss or damage to Seller arising from any breach of any representation or
warranty or default of any covenant or agreement of Buyer under this Agreement;
(3) any misrepresentation, breach of warranty, or nonperformance of any
obligation or nonfulfillment of any condition on the part of Buyer under this
Agreement, and (4) all costs and expenses, including court costs and reasonable
attorneys' fees, related to any actions, suits or judgments incident to any of
the foregoing.
16. Notices. All notices or other communications hereunder shall be in
writing and shall be made by hand delivery, nationally-recognized overnight
courier, electronic mail or registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
X10 Wireless
Technology, Inc.: X10 Wireless Technology, Inc.
00000 00xx Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: Chief Financial Officer
Email: Xxxx@x00.xxx
X-10 (USA): X-10 (USA) Inc.
00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxxxx, Finance Director
Email: xxxxx00@xxx.xxx
or at such other address as shall be furnished by any of the parties by like
notice, and such notice or communication shall be deemed to have been given or
made as of the date so delivered, if delivered personally, one (1) day after
deposit with a nationally-recognized overnight courier, and three (3) calendar
days after so mailed, if sent by registered or certified mail.
17. Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and supersedes all prior arrangements and negotiations
between the parties. This Agreement may be modified or amended only by mutual
written consent of the parties; provided, however, that after the effective date
of the Buyer's first firm commitment underwritten public offering of its
securities registered under the Securities Act of 1933, as amended, any such
modification or amendment shall be effective only if it is
5.
approved by a majority of the directors serving on the Audit Committee of the
Board of Directors of Buyer.
18. Confidentiality. Seller understands and agrees that all financial
information and other information provided to Seller by Buyer is proprietary and
confidential information. Seller agrees to keep all such information in strict
confidence and not to disclose it to any third party without the prior written
consent of Buyer. Seller further agrees that all information and materials
which result from obligations performed hereunder shall be and remain the
property of Buyer and, upon termination of this Agreement or earlier request,
shall be delivered to Buyer.
19. Governing Law. This Agreement will be governed and construed in
accordance with the laws of the State of Washington as applied to transactions
taking place wholly within Washington between Washington residents. Seller
hereby expressly consents to the exclusive personal jurisdiction of and venue in
the state and federal courts located in King County, Washington for any lawsuit
filed there arising from or related to this Agreement. This Agreement shall not
be subject to or governed by the United Nations Convention on Contracts for the
International Sale of Goods, which is specifically disclaimed by the parties.
20. Severability. If any portion of this Agreement shall be held invalid
or inoperative, then, so far as is reasonable and possible, the remainder of
this Agreement shall be considered valid and operative, and effect shall be
given to the intent manifested by the portion held invalid or inoperative.
21. Attorneys' Fees. The substantially prevailing party in any action
between the parties which is based on this Agreement or any document related
hereto shall have its reasonable attorneys' fees and other costs incurred in
such action or proceeding including any incurred for pre-suit, trial,
arbitration, post-judgment and appeal, paid by the other party.
22. Waiver of Conflicts. Each party to this Agreement acknowledges that
Xxxxxx Godward LLP ("Xxxxxx Godward"), outside general counsel to Buyer,
represents only Buyer with respect to the matters contained in this Agreement
and does not represent Seller in connection herewith. Seller understands that
and agrees that it should not rely upon the advice of Xxxxxx Godward with
respect to the matters contained herein, and that it has had adequate
opportunity to obtain the advice of independent legal counsel with respect to
the matters contained in this Agreement.
6.
In Witness Whereof, the parties have executed this Amended and Restated
Asset Purchase Agreement as of the date set forth below.
SELLER: BUYER:
X-10 (USA) Inc., X10 Wireless Technology, Inc.,
a New Jersey corporation a Delaware corporation
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxx Xxxxxxxx
---------------------------------- ----------------------------------
Xxxx Xxxxxxxx, Finance Director Xxxx Xxxxxxxx, CFO
7.
EXHIBIT A
DESCRIPTION OF PROPERTY
I. Internet Assets. All of Seller's right, title and interest in and to all
of Seller's Internet Uniform Resource Locators ("URLs"), including all domain
and website names, addresses and registrations and other files associated
therewith, including, without limitation, the following URLs:
x00.xxx XX0xxxxxxxx.xxx
x00xxxxxxxxxxxxxx.xxx x00xxxxxxxxxxxxxxxxxxx.xxx
x00xxxxxxxxxxxx.xxx x-00.xxx
x00XXX.xxx x00XXX.xxx
Xxxxxxxxxx.xxx x00XXX.xxx
X00xxxxxx.xxx xxxxxxxxxxx.xxx
II. Assets Associated with the Internet Assets. The following items used by
Seller in connection with the Internet Assets:
Customer Lists: including the names, addresses, telephone numbers and, if
available, e-mail addresses of all customers that bought products from X-10
(USA) Inc. or X-10 Ltd. on or before September 30, 1999.
Promotional Materials: all sales, product, marketing and promotional
materials or aids associated with the Internet Assets.
Vendor and Supplier Information: lists of vendors and suppliers, including
their names, addresses, telephone numbers and the names of their
representatives.
Other Records: all other records, or copies thereof, relating to Seller's
use of the Internet Assets.
Intellectual Property Rights: All intellectual property rights associated
with the Internet Assets.
EXHIBIT B
Other Assets and Liabilities
Assets Acquired
Employee Advance 3,000.00 Xxxx Xxxxx advance from September
Prepaid 10,166.48 prepaid ads for yahoo
Cash 100,000.00 amount in secured merchant account
Inventory 124,425.28
Cash 328,788.65 amount in US Bank
Cash 532,553.19 amount in Seafirst account
--------------
1,098,933.60
Liabilities Assumed
accrued freight collected 4,970.00 accrued freight
accrued employer exp 9,610.37
due to USA Begin balance 10,072.40 outstanding ap debt
accrued vacation 15,114.16
Accrued Expenses 16,122.31 bank fees
accrued payroll 21,785.69
Allowance for Returns 214,190.00
Sales Tax Payable 264,664.77 sales tax payable
Deferred Revenue 190,859.68 deferred revenue
due to USA Begin balance 1,594,375.12 outstanding ap debt
--------------
2,341,764.50
--------------
Note from USA to WTI to assume 1,242,830.90 net liabilities
business as of 10/1/99 ==============
Fixed Assets Purchased
Furniture and Fixtures 7,077.08
Computers 52,918.16
--------------
59,995.24 assets
==============
--------------
Net amount owed to WTI for business 1,182,835.66
==============
EXHIBIT C
Warranty Xxxx of Sale
KNOW ALL MEN BY THESE PRESENTS, that X-10 (USA) Inc., a New Jersey
corporation ("Seller"), for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged by it, does hereby sell, transfer,
convey, assign and deliver to X10 Wireless Technology, Inc., a Delaware
corporation ("Buyer"), all of Seller's right, title and interest in and to the
following (collectively, the "Assets"):
All assets enumerated on Exhibit A to that certain Amended and Restated
Asset Purchase Agreement of even date herewith.
Seller warrants that it has good, valid and marketable title to the Assets,
free and clear of any lien, security interest or encumbrance. This Warranty
Xxxx of Sale is being delivered in connection with the Asset Purchase Agreement
dated as of October 1, 1999, between Seller and Buyer, and is subject to, and is
entitled to the benefits in respect thereof.
This Warranty Xxxx of Sale shall be binding upon and inure to the benefit
of Buyer and Seller and their respective successors and assigns.
IN WITNESS WHEREOF, Seller hereby executes this Warranty Xxxx of Sale to be
effective as of October 1, 1999.
X-10 (USA) Inc.,
a New Jersey corporation
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Xxxx Xxxxxxxx, Finance Director
