EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger ("Agreement") is entered into as of the
4th day of March, 1999, by and among XXXXXXXXXX.XXX, INC., a Nevada corporation
("Netivation"), THE ONLINE MEDICAL BOOKSTORE, INC., an Idaho corporation
("Netivation Sub"), THE ONLINE MEDICAL BOOKSTORE, LLC, a Delaware limited
liability company ("Company"), and XX. XXXXXX X. XXXXX, M.D. ("Shareholder").
R E C I T A L S :
A. The Shareholder is the holder and owner of all of the issued and
outstanding membership interests of Company (all of such outstanding interests,
the "Shares").
B. Netivation is the owner and holder of all of the issued and outstanding
shares of Netivation Sub.
C. Netivation desires to acquire Company by means of a merger of Company
with and into Netivation Sub, and Shareholder and Company desire the same, upon
the terms and subject to the conditions of the this Agreement.
D. Pursuant to such merger, Netivation Sub will be the surviving
corporation (sometimes referred to herein as the "Surviving Corporation") and
Company will be the merged or disappearing company (sometimes referred to herein
as the "Merged Company");
E. The parties hereto have determined that the proposed merger of Company
with and into Netivation Sub is in the best interests of their respective
entities and owners.
F. Such merger is subject to, among other things, approval by the Boards
of Directors of Netivation and Netivation Sub and the Shareholder as required
under Section 18-209 of the Delaware Limited Liability Company Act (the "DLLCA")
and Part 11 of the Idaho Business Corporation Act (the "IBCA").
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
A G R E E M E N T :
1. The Merger.
1.1 The Merger. At the Effective Time (as defined below) and
subject to and upon the terms of this Agreement, the DLLCA, and the IBCA,
Company shall be merged with and into Netivation Sub (the "Merger"), the
separate company existence of Company shall cease, and Netivation Sub shall
continue as the surviving corporation in accordance with Section 1.4 (the
AGREEMENT AND PLAN OF MERGER - 1
"Surviving Corporation"). The parties intend that the merger be treated for
federal income tax purposes as a tax-free reorganization under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code of 1986, as amended
(the "Code").
1.1.1 Delaware Certificate of Merger. At the Closing, Company and
Netivation Sub shall execute and acknowledge a Delaware Certificate of Merger in
the form of Exhibit 1.1.1 ("Delaware Certificate of Merger") providing for the
Merger pursuant to Section 18-209 of the DLLCA.
1.1.2 Idaho Articles of Merger. At the Closing, Netivation Sub shall
execute and acknowledge Idaho Articles of Merger in the form of Exhibit 1.1.2
("Idaho Articles of Merger") providing for the Merger pursuant to Part 11 of the
IBCA.
1.1.3 Filings. Immediately upon completion of the Closing, Company
and Netivation Sub shall cause the Merger to be consummated by filing or causing
to be filed the Idaho Articles of Merger with the Secretary of State of Idaho
and by filing or causing to be filed the Delaware Certificate of Merger with the
Secretary of State of Delaware, pursuant to Section 30-1-1105 of the IBCA and
Section 18-209 of the DLLCA, respectively.
1.2 Effective Time. The Effective Time of the Merger (the "Effective
Time") shall be the first business day when the Merger is effective under both
the IBCA and the DLLCA.
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided under all applicable provisions of the IBCA and the DLLCA.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time:
1.3.1 Shares. All then outstanding Shares shall, by virtue
of the Merger, and without any action on the part of the holder thereof, be
converted into the number of shares of Netivation's common stock (the
"Netivation Stock") equal to One Million Nine Hundred Twenty-eight Thousand Five
Hundred Seventy-one (1,928,571) divided by the per share effective price of
Netivation's common stock upon the effectiveness of Netivation's initial public
offering ("IPO"), subject to the Securities Law Restrictions and the Hold
Restriction, which Netivation Stock, together with Two Hundred Fifty Thousand
Dollars ($250,000), shall constitute the total merger consideration to
Shareholder. The number of shares of the Netivation Stock issuable to the
Shareholder hereunder shall be rounded to the nearest whole share; Netivation
shall not be obligated to issue fractional shares of Netivation Stock and cash
shall not be paid in lieu of fractional shares. Netivation shall pay the
Shareholder Seventy-five Thousand Dollars ($75,000) cash upon the execution of
this Agreement, the receipt of which is hereby acknowledged. Netivation shall
pay the Shareholder the remaining One Hundred Seventy-five Thousand Dollars
($175,000) cash at the Closing.
AGREEMENT AND PLAN OF MERGER - 2
1.3.2 Other Effects. Any and all assets, rights, privileges,
powers and franchises of Netivation Sub and the Company, individually and
collectively, shall vest in the Surviving Corporation, and any and all debts,
liabilities, duties and obligations of Netivation Sub and the Company,
individually and collectively, shall vest in, be deemed to be assumed by and
become debts, liabilities, duties and obligations of the Surviving Corporation.
1.4 The Surviving Corporation.
1.4.1 Articles of Incorporation. The Articles of Incorporation of
Netivation Sub as in effect at the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation, until thereafter amended as provided
by Law and such Certificate.
1.4.2 Bylaws. The Bylaws of Netivation Sub as in effect at the
Effective Time shall be the Bylaws of the Surviving Corporation, until
thereafter amended as provided by Law, the Articles of Incorporation of the
Surviving Corporation and such Bylaws.
1.4.3 Directors and Officers. Promptly following the Effective Time,
the individuals listed on Exhibit 1.4.3 shall be elected as the directors and
officers of the Surviving Corporation.
1.4.4 Surrender. At the Closing, the Merged Company shall surrender
its membership registry, minute book and company seal, if any, to the Surviving
Corporation. At the Effective Time the membership transfer books of the Merged
Company shall be closed, and there shall be no registration of transfers of
membership interests of the Merged Company thereafter.
1.4.5 No Transfers. There shall be no further registration or
transfers of the Shares on the transfer books of the Surviving Corporation of
the Shares which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled in consideration of the
payment of the appropriate number of shares of Netivation Stock as provided
herein, except as otherwise provided by Law.
1.5 Additional Actions. If, at any time after the Closing, the Surviving
Corporation shall consider or be advised that any further assignments or
assurances in law or any other acts are necessary or desirable to (a) vest,
perfect or confirm, of record or otherwise, in the Surviving Corporation its
rights, title or interest in, to or under any of the rights, properties or
assets of the Merged Company acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger, or (b) otherwise
carry out the purposes of this Agreement and the transactions contemplated
hereby, the Merged Company shall be deemed to have granted to the Surviving
Corporation an irrevocable power of attorney to execute and deliver all such
proper deeds, assignments, novations and assurances in law and to do all acts
necessary or proper to vest, perfect or confirm title to and possession of such
rights, properties or assets in the Surviving Corporation and
AGREEMENT AND PLAN OF MERGER - 3
otherwise to carry out the purpose of this Agreement and the transactions
contemplated hereby; and the proper officers and directors of the Surviving
Corporation are fully authorized in the name of the Merged Company or otherwise
to take any and all such actions.
1.6 [Intentionally Blank.]
1.7 Securities Law Restrictions and Hold Restriction. "Securities Law
Restrictions" means restrictions applicable to shares of the Netivation Stock by
virtue of the fact that such shares of Netivation common stock will not be
registered under the Securities Act and applicable state "Blue Sky" laws at or
after the time of issuance, and must be held indefinitely unless or until (a)
they are sold to Netivation, (b) they are subsequently registered under the
Securities Act of 1933 and applicable state "Blue Sky" laws or (c) an exemption
from such registration is available for any subsequent sale or distribution. The
"Hold Restriction" means the Netivation Stock may be restricted as determined by
the managing underwriter of Netivation's IPO, provided, however, such
restrictions shall be no more restrictive than those imposed upon Netivation's
common stock held by any of Netivation's officers and, in any event, shall
expire no later than one (1) year after the effective date of the IPO. At least
ninety (90) days prior to the expiration of any resale restrictions imposed by
the underwriter, Netivation shall commence the process of registering the
Netivation Stock under the Securities Act of 1933 and shall use its best efforts
to conclude such registration as soon thereafter as possible.
2. Representations and Warranties of the Company and Shareholder.
As a material inducement to Netivation to enter into this Agreement,
Shareholder and the Company, jointly and severally, represent and warrant that:
2.1 Organization and Power. The Company is a limited liability
company duly organized and validly existing under the laws of the state of
Delaware and the Company is qualified to do business in every jurisdiction in
which its ownership of property or conduct of business requires it to qualify.
The Company has all requisite power and authority and all material licenses,
permits, and authorizations necessary to own and operate its properties and to
carry on its business as now conducted. The copies of the Company's certificate
of formation and operating agreement that have been furnished to Netivation's
counsel reflect all amendments made thereto at any time prior to the date of
this Agreement and are correct and complete.
2.2 Shares and Related Matters. All membership interests of the
Company are owned, beneficially and of record, by Shareholder. The Company has
not agreed, orally or in writing, to issue any additional interests, nor does it
have outstanding, nor has it agreed, orally or in writing, to issue, any options
or rights to purchase or otherwise acquire any additional interests. The
Company is not subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any membership interests. The Company has not
violated any applicable securities laws or regulations in connection with the
offer or sale of its securities. All of the outstanding membership interests of
the Company are validly issued, fully paid, and nonassessable. Shareholder has,
and at the Effective Time, Netivation will have, good and marketable title to
the
AGREEMENT AND PLAN OF MERGER - 4
Shares, free and clear of all security interests, liens, encumbrances, or
other restrictions or claims, subject only to restrictions as to marketability
imposed by securities laws.
2.3 Subsidiaries. The Company does not own or hold any rights
to acquire any shares of stock or any other security or interest in any other
corporation or entity.
2.4 Conduct of Business; Liabilities. The Company is not in
default under, and no condition exists that with notice or lapse of time would
constitute a default of the Company under (i) any mortgage, loan agreement,
evidence of indebtedness, or other instrument evidencing borrowed money to which
the Company is a party or by which the Company or the properties of the Company
are bound or (ii) any judgment, order, or injunction of any court, arbitrator,
or governmental agency that would reasonably be expected to affect materially
and adversely the business, financial condition, or results of operations of the
Company taken as a whole.
2.5 Financial Statements. The unaudited balance sheet of the
Company as of December 31, 1998, in the form attached to this Agreement as
Exhibit 2.5(A) and the income statement for the period ending December 31, 1998,
in the form attached to this Agreement as Exhibit 2.5(B) (collectively the
"December 31, 1998, Financial Statements"), fairly presents the financial
position of the Company as at December 31, 1998. Except as contemplated by or
permitted under this Agreement, there are no adjustments that would be required
on review of the December 31, 1998, Financial Statements that would,
individually or in the aggregate, have a material negative effect upon the
Company's reported financial condition.
2.6 No Undisclosed Liabilities. Except for (i) liabilities and
obligations incurred in the ordinary course of business since December 31, 1998,
("Statement Date"), and (ii) liabilities or obligations described in Schedule
2.6, neither the Company nor any of the property of the Company is subject to
any material liability or obligation.
2.7 Absence of Certain Changes. Except as contemplated or
permitted by this Agreement, since the Statement Date there has not been:
2.7.1 Any material adverse change in the business, financial
condition, operations, or assets of the Company;
2.7.2 Any damage, destruction, or loss, whether covered by
insurance or not materially adversely affecting the properties or business of
the Company;
2.7.3 Any sale or transfer by the Company of any tangible or
intangible asset other than in the ordinary course of business, any mortgage or
pledge or the creation of any security interest, lien, or encumbrance on any
such asset, or any lease of property, including equipment, other than tax liens
with respect to taxes not yet due and contract rights of customers in inventory;
AGREEMENT AND PLAN OF MERGER - 5
2.7.4 Any declaration, setting aside, or payment of a
distribution in respect of or the redemption or other repurchase by the Company
of any membership interests in the Company;
2.7.5 Any material transaction not in the ordinary course of
business of the Company;
2.7.6 The lapse of any material trademark, assumed name, trade
name, service xxxx, copyright, or license or any application with respect to the
foregoing;
2.7.7 The grant of any increase in the compensation of officers
or employees (including any such increase pursuant to any bonus, pension,
profit-sharing, or other plan) other than customary increases on a periodic
basis or required by agreement or understanding in the ordinary course of
business and in accordance with past practice;
2.7.8 The discharge or satisfaction of any material lien or
encumbrance or the payment of any material liability other than current
liabilities in the ordinary course of business;
2.7.9 The making of any material loan, advance, or guaranty
to or for the benefit of any person except the creation of accounts receivable
in the ordinary course of business; or
2.7.10 An agreement to do any of the foregoing.
2.8 ERISA and Related Matters. Schedule 2.8 sets forth a description
of all "Employee Welfare Benefit Plans" and "Employee Pension Benefit Plans" (as
defined in (S)(S) 3(1) and 3(2), respectively, of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) existing on the date hereof that are
or have been maintained or contributed to by the Company. Except as listed on
Schedule 2.8, the Company does not maintain any retirement or deferred
compensation plan, savings, incentive, membership interest purchase plan,
unemployment compensation plan, vacation pay, severance pay, bonus or benefit
arrangement, insurance or hospitalization program or any other fringe benefit
arrangement for any employee, consultant or agent of the Company, whether
pursuant to contract, arrangement, custom or informal understanding, which does
not constitute an "Employee Benefit Plan" (as defined in (S) 3(3) of ERISA), for
which the Company may have any ongoing material liability after Closing. The
Company does not maintain nor has it ever contributed to any Multiemployer Plan
as defined by (S) 3(37) of ERISA. The Company does not currently maintain any
Employee Pension Benefit Plan subject to Title IV of ERISA. There have been no
"prohibited transactions" (as described in (S) 406 of ERISA or (S) 4975 of the
Code) with respect to any Employee Pension Benefit Plan or Employee Welfare
Benefit Plan maintained by the Company as to which the Company has been a party.
As to any employee pension benefit plan listed on Schedule 2.8 and subject to
Title IV of ERISA, there have been no reportable events (as such term is defined
in (S) 4043 of ERISA).
AGREEMENT AND PLAN OF MERGER - 6
2.9 Litigation. There are no material actions, suits, proceedings,
orders, investigations, or claims pending or, to the Shareholder's and the
Company's knowledge, overtly threatened against the Company or any property of
the Company, at law or in equity, or before or by any governmental department,
commission, board, bureau, agency, or instrumentality; the Company is not
subject to any arbitration proceedings under collective bargaining agreements or
otherwise or, to Shareholder's and the Company's knowledge, any governmental
investigations or inquiries; and, to the knowledge of Shareholder and the
Company, there is no basis for any of the foregoing.
2.10 Tax Matters. The Company has prepared in a substantially
correct manner and has filed all federal, state, local, and foreign tax returns
and reports heretofore required to be filed by it and has paid all taxes shown
as due thereon. No taxing authority has asserted any deficiency in the payment
of any tax or informed the Company that it intends to assert any such deficiency
or to make any audit or other investigation of the Company for the purpose of
determining whether such a deficiency should be asserted against the Company.
The Company has elected to be taxed as a Subchapter S corporation.
2.11 Compliance with Laws. To the Shareholder's knowledge, the Company
is, in the conduct of its business, in substantial compliance with all laws,
statutes, ordinances, regulations, orders, judgments, or decrees applicable to
them, the enforcement of which, if the Company was not in compliance therewith,
would have a materially adverse effect on the business of the Company, taken as
a whole. Neither Shareholder nor the Company have received any notice of any
asserted present or past failure by the Company to comply with such laws,
statutes, ordinances, regulations, orders, judgments, or decrees.
2.12 No Brokers. There are no claims for brokerage commissions,
finders' fees, or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement binding
upon any of the parties hereto.
2.13 Insurance. Schedule 2.13 contains a list of each insurance
policy maintained by the Company with respect to its properties, assets, and
businesses, and each such policy is in full force and effect. The Company is
not in material default with respect to its obligations under any such policy
maintained by it. Neither Shareholder nor the Company has been notified of the
cancellation of any of the insurance policies listed on Schedule 2.13 or of any
material increase in the premiums to be charged for such insurance policies.
2.14 Employees and Labor Relations Matters. Except as provided in this
Agreement:
2.14.1 Neither Shareholder nor the Company is aware that any
executive or key employee of the Company or any group of employees of the
Company has any plans to terminate employment with the Company;
AGREEMENT AND PLAN OF MERGER - 7
2.14.2 To the Shareholder's knowledge, the Company has
substantially complied in all material respects with all labor and employment
laws, including provisions thereof relating to wages, hours, equal opportunity,
collective bargaining, Americans With Disabilities Act, and the payment of
social security and other taxes;
2.14.3 There is no unfair labor practice charge, complaint, or
other action against the Company pending or, to Shareholder's and the Company's
knowledge, threatened before the National Labor Relations Board and the Company
is not subject to any order to bargain by the National Labor Relations Board;
2.14.4 No questions concerning representation have been raised
or, to Shareholder's and the Company's knowledge, are threatened with respect to
employees of the Company;
2.14.5 No grievance that might have a material adverse effect
on the Company and no arbitration proceeding arising out of or under any
collective bargaining agreement is pending and, to the knowledge of Shareholder
and the directors and responsible officers of the Company, no basis exists for
any such grievance or arbitration proceeding; Company has no collective
bargaining or union contracts agreement in effect or being negotiated; and
2.14.6 To the knowledge of Shareholder and the directors and
responsible officers of the Company, no employee of the Company is subject to
any noncompetition, nondisclosure, confidentiality, employment, consulting, or
similar agreements with persons other than the Company relating to the present
business activities of the Company; there is no labor strike, dispute, request
for representation, slowdown, or stoppage pending or, to Shareholder's and the
Company's knowledge, threatened against the Company.
2.15 Disclosure. Neither this Agreement nor any of the schedules,
attachments, written statements, documents, certificates, or other items
prepared or supplied to Netivation by or on behalf of the Company or Shareholder
with respect to this purchase contain any untrue statement of a material fact or
omit a material fact necessary to make each statement contained herein or
therein not misleading. Shareholder has not intentionally concealed any fact
known by Shareholder to have a material adverse effect upon the Company's
existing or expected financial condition, operating results, assets, customer
relations, employee relations, or business prospects taken as a whole.
2.16 Power of Attorney. No material power of attorney or similar
authorization given by the Company is presently in effect.
2.17 Accounts Receivable. All accounts receivable of the Company
reflected in the December 31, 1998, Financial Statements represent bona fide
sales actually made in the ordinary course of business.
AGREEMENT AND PLAN OF MERGER - 8
2.18 Agreements and Commitments. Schedule 2.18 contains a complete and
accurate list of each agreement, contract, instrument, and commitment (including
license agreements) to which the Company is a party that provides for payments
in excess of $5,000 per year or whose term is in excess of one year and is not
cancelable upon 30 or fewer days' notice without any liability, penalty, or
premium, other than a nominal cancellation fee or charge ("Third Party
Agreements"). Company is not in material default under any Third Party
Agreements, nor, to Shareholder's and the Company's knowledge, does there exist
any event that, with notice or the passage of time or both, would constitute a
material default or event of default by the Company under any Third Party
Agreements.
2.19 Personal Property. Without material exception, Schedule 2.19
contains lists of all tangible personal property and assets owned or held by the
Company and used or useful in the conduct of the business of the Company. Except
as set forth in Schedule 2.19, the Company owns and has good title to such
properties and none of such properties is subject to any security interest,
mortgage, pledge, conditional sales agreement, or other lien or encumbrance
(except for liens for current taxes, assessments, charges, or other governmental
levies not yet due and payable). The Company has delivered to Netivation copies
of all leases and other agreements relating to property described in Schedule
2.19 (including any and all amendments and other modifications to such leases
and other agreements) all of which are valid and binding, and the Company is not
in material default under any such leases or agreements. Except as set forth in
Schedule 2.19 and to the Shareholder's knowledge, all material properties listed
therein are generally in good operating condition and repair (ordinary wear and
tear excepted), are performing satisfactorily, and are available for immediate
use in the conduct of the business and operations of the Company. To the
Shareholder's knowledge, all such tangible personal property is in compliance in
all material respects with all applicable statutes, ordinances, rules, and
regulations. The properties listed in Schedule 2.19 include substantially all
such properties necessary to conduct the business and operations of the Company
as now conducted.
2.20 Real Property. Schedule 2.20 contains a list of all real
property currently leased by the Company and used or useful in the conduct of
the business operations of the Company. The Company owns no real property.
Shareholder has delivered to Netivation copies of all leases listed in Schedule
2.20 (including any and all amendments and other modifications of such leases),
which leases are valid and binding. To the Shareholder's knowledge, the Company
is not in material default under any such leases. To the Shareholder's
knowledge, all property listed in Schedule 2.20 (including improvements thereon)
is in satisfactory condition and repair consistent with its present use and is
available for immediate use in the conduct of the business of the Company.
Except as set forth in Schedule 2.20 and to the Shareholder's knowledge, none of
the property listed in Schedule 2.20 or subject to leases listed in Schedule
2.20 violates in any material respect any applicable building or zoning code or
regulation of any governmental authority having jurisdiction. The property and
leases described in Schedule 2.20 include all such property or property
interests necessary to conduct the business and operations of the Company as
they are presently conducted.
2.21 Personnel. Schedule 2.21 sets forth a true and complete list of:
AGREEMENT AND PLAN OF MERGER - 9
2.21.1 The names, title, and current salaries of all
officers of the Company;
2.21.2 [Intentionally blank];
2.21.3 The wage rates (or ranges, if applicable) for each
class of exempt and nonexempt, salaried and hourly employees of the Company;
2.21.4 All scheduled or contemplated increases in
compensation or bonuses; and
2.21.5 All scheduled or contemplated employee promotions.
2.22 Patents, Trademarks, Trade Names, Etc. Schedule 2.22
contains an accurate and complete list of all patents, trademarks, tradenames,
service marks, and copyrights, and all applications therefor, presently owned or
held subject to license by the Company and, to the Company's knowledge, the use
thereof by the Company does not materially infringe on any patents, trademarks,
or copyrights or any other rights of any person. To Shareholder's and the
Company's knowledge, the Company has not operated and is not operating its
business in a manner that infringes the proprietary rights of any other person
in any patents, trademarks, trade names, service marks, copyrights, or
confidential information. Except as set forth in Schedule 2.22, the Company has
not received any written notice of any infringement or unlawful use of such
property.
2.23 Merger. The merger contemplated by this Agreement shall be
valid under Delaware law when consummated in accordance with the terms of this
Agreement.
3. Representations and Warranties of Netivation and Netivation Sub.
As a material inducement to Shareholder to enter into this Agreement, Netivation
and Netivation Sub hereby represent and warrant to Shareholder as follows:
3.1 Organization; Power. Netivation is a corporation duly
incorporated and validly existing under the laws of the state of Nevada and
Netivation Sub is a corporation duly incorporated and validly existing under the
laws of the state of Idaho, and each has all requisite corporate power and
authority to enter into this Agreement and perform its obligations hereunder.
3.2 Authorization. The execution, delivery, and performance by
Netivation and Netivation Sub of this Agreement and all other agreements
contemplated hereby to which either is a party have been duly and validly
authorized by all necessary corporate action of Netivation and Netivation Sub,
and this Agreement and each such other agreement, when executed and delivered by
the parties thereto, will constitute the legal, valid, and binding obligation of
Netivation and Netivation Sub enforceable against each of them in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, and similar statutes affecting creditors' rights
generally and judicial limits on equitable remedies.
AGREEMENT AND PLAN OF MERGER - 10
3.3 No Conflict with Other Instruments or Agreements. The execution,
delivery, and performance by Netivation and Netivation Sub of this Agreement and
all other agreements contemplated hereby to which either is a party will not
result in a breach or violation of, or constitute a default under, the Articles
of Incorporation or Bylaws or any material agreement to which either is a party
or by which either is bound.
3.4 Litigation. There are no actions, suits, proceedings, or
governmental investigations or inquiries pending or, to the knowledge of
Netivation or Netivation Sub, threatened against Netivation or Netivation Sub or
its properties, assets, operations, or businesses that might delay, prevent, or
hinder the consummation of this purchase.
3.5 Investment Representations.
3.5.1 During the course of the negotiation of this Agreement,
Netivation and Netivation Sub have reviewed all information provided to it by
the Company and has had the opportunity to ask questions of and receive answers
from representatives of the Company concerning the Company and this merger, and
to obtain certain additional information requested by Netivation or Netivation
Sub.
3.5.2 Netivation and Netivation Sub understand that the Shares
have not been registered under the Securities Act of 1933 ("1933 Act"), or under
any state securities law.
3.6 Principal Place of Business. Netivation's and Netivation Sub's
principal places of business are at Coeur d'Alene, Idaho.
3.7 Scope of Current Business Operations. As of the date of this
Agreement, Netivation's primary business operations consist of the activities
listed on Schedule 3.7 attached hereto.
3.8 Tax Representations.
3.8.1 Netivation Sub will acquire at least 90 percent of the
fair market value of the net assets and at least 70 percent of the fair market
value of the gross assets held by the Company immediately prior to the Merger.
For purposes of this representation, amounts used by the Company to pay
reorganization expenses and all redemptions and distributions (except for
regular, normal dividends) made by the Company immediately preceding the Merger
will be included as assets of the Company held immediately prior to the Merger.
3.8.2 Prior to the Merger, Netivation will be in control of
Netivation Sub within the meaning of Section 368(c) of the Code.
AGREEMENT AND PLAN OF MERGER - 11
3.8.3 Following the Merger, Netivation Sub will not issue additional
shares of its stock that would result in Netivation losing control of Netivation
Sub within the meaning of Section 368(c) of the Code.
3.8.4 Netivation has no plan or intention to reacquire any of its
stock issued in the Merger.
3.8.5 Neither Netivation nor Netivation Sub has any plan or intention
to sell or otherwise dispose of any of the assets acquired from the Company
(except for sales and dispositions made in the ordinary course of business or
transfers described in Section 368(a)(2)(C)). Neither Netivation nor Netivation
Sub has any plan or intention to liquidate Netivation Sub, to merge or
consolidate Netivation Sub with or into another corporation (except as
contemplated by the Agreement), or to sell or otherwise dispose of the stock of
Netivation Sub.
3.8.6 Following the Merger, Netivation Sub will continue the historic
business of the Company or use a significant portion of the Company's business
assets in a business.
3.8.7 No stock of Netivation Sub will be issued in the Merger.
3.8.8 There is no intercompany indebtedness existing between
Netivation and the Company or between Netivation Sub and the Company that was
issued, acquired, or will be settled at a discount.
3.8.9 Neither Netivation nor Netivation Sub is an investment company
as defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.
3.8.10 None of the compensation for services rendered received by any
member-employee of the Company will be accounted for as separate consideration
for, or allocable to, any part of the member's interest in the Company; none of
the Purchaser Stock received by any member-employee will be accounted for as
separate consideration for, or allocable to, any employment agreement or
services performed or to be performed; and the compensation paid to any member-
employee will be accounted for as services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arms's length for
similar services.
3.8.11 Netivation and Netivation Sub will treat the Merger as a
reorganization pursuant to Sections 368(a)(1)(A) and (a)(2)(D) of the Internal
Revenue Code.
3.8.12 Netivation has a business purpose for the Merger which is
"germane to the continuance of the business" of Netivation within the meaning of
Treasury Regulation (S) 1.368-2(g).
3.8.13 Netivation Sub has no outstanding options, warrants or
convertible securities.
AGREEMENT AND PLAN OF MERGER - 12
3.8.14 Netivation is a corporation for United States federal
income tax purposes.
3.8.15 Netivation will provide to the Company and the former
members of the Company on a timely basis all the information necessary to comply
with all of the reporting requirements arising out of the Merger, including but
not limited to federal income tax reporting requirements.
3.9 Netivation Stock. Upon issuance and delivery of the
Netivation Stock to Shareholder, such shares will be duly and validly issued,
fully paid and nonassessable, and Shareholder will have good and marketable
title to the Netivation Stock, free and clear of all security interests, liens,
encumbrances, or other restrictions or claims, other than resale restrictions
imposed by law and by Netivation's managing underwriter.
3.10 Merger. The merger contemplated by this Agreement shall be
valid under Idaho law when consummated in accordance with the terms of this
Agreement.
4. Conduct of the Company's Business Pending the Closing. From the
date hereof until the Closing, and except as otherwise consented to or approved
by Netivation, Shareholder and the Company covenant and agree with Netivation as
follows:
4.1 Regular Course of Business. The Company will operate its business
in accordance with the reasonable judgment of its management diligently and in
good faith, consistent with past management practices, and the Company will use
its best efforts to keep available the services of present officers and
employees (other than planned retirements) and to preserve its present
relationships with persons having business dealings with it. Shareholder will
confer with Netivation concerning operational matters of a material nature and
will otherwise report periodically to Netivation concerning the status of the
business, operations, and finances of the Company.
4.2 Distributions. The Company will not declare, pay, or set aside for
payment any distribution to members.
4.3 Capital Changes. The Company will not issue any membership
interests, or issue or sell any securities convertible into, or exchangeable
for, or options, warrants to purchase, or rights to subscribe to, any membership
interests or subdivide or in any way reclassify any membership interests,
cancel, or redeem any such membership interests.
4.4 Assets. The assets, property, and rights now owned by the Company
will be used, preserved, and maintained, as far as practicable, in the ordinary
course of business, to the same extent and in the same condition as said assets,
property, and rights are on the date of this Agreement, and no unusual or novel
methods of manufacture, purchase, sale, management, or operation of said
properties or business or accumulation or valuation of inventory will be made or
instituted. Without the prior consent of Netivation, the Company will not
encumber any of its assets
AGREEMENT AND PLAN OF MERGER - 13
or make any commitments relating to such assets, property, or business, except
in the ordinary course of its business.
4.5 Insurance. The Company will keep or cause to be kept in effect and
undiminished the insurance now in effect on its various properties and assets,
and will purchase such additional insurance, at Netivation's cost, as Netivation
may request.
4.6 Employees. The Company will not grant to any employee any
promotion, any increase in compensation, or any bonus or other award other than
promotions, increases, or awards that are regularly scheduled in the ordinary
course of business or contemplated on the date of this Agreement.
4.7 No Violations. The Company will comply in all material respects
with all statutes, laws, ordinances, rules, and regulations applicable to it in
the ordinary course of business.
4.8 Public Announcements. No press release or other announcement to
the employees, customers, or suppliers of the Company related to this Agreement
or this purchase will be issued without the joint approval of the parties,
unless required by law, in which case Netivation and Shareholder will consult
with each other regarding the announcement.
4.9 Assignments and Consents. The Company will obtain all necessary
assignments and consents with respect to all agreements and contracts of the
Company.
4.10 Shareholder Approval. The Company will obtain approval by the
Company's sole member, Shareholder, of the transactions provided for in this
Agreement.
5. Covenants of the Company and Shareholder. Company and Shareholder
covenant and agree with Netivation as follows:
5.1 Satisfaction of Conditions. The Company will use reasonable
efforts to obtain as promptly as practicable the satisfaction of the conditions
to Closing set forth in Section 8 and any necessary consents or waivers under or
amendments to agreements by which the Company is bound. If any such consent or
approval is not obtained, the Company will use commercially reasonable efforts
to secure an arrangement reasonably satisfactory to Netivation intended to
provide for Netivation following the Closing the benefits under each contract or
agreement for which such consent or approval is not obtained.
5.2 Supplements to Schedules. From time to time prior to the Closing,
Shareholder and the Company will promptly supplement or amend the Schedules with
respect to any matter hereafter arising that, if existing or occurring at the
date of this Agreement, would have been required to be set forth or described in
any Schedule and will promptly notify Netivation of any breach by either of them
that either of them discovers of any representation, warranty, or covenant
contained in this Agreement. No supplement or amendment of any Schedule made
pursuant to this
AGREEMENT AND PLAN OF MERGER - 14
section will be deemed to cure any breach of any representation of or warranty
made in this Agreement unless Netivation specifically agrees thereto in writing;
provided, however, that if this purchase is closed, Netivation will be deemed to
have waived its rights with respect to any breach of a representation, warranty,
or covenant or any supplement to any Schedule of which it shall have been
notified pursuant to this Section 5.2.
5.3 No Solicitation. Until the Closing or termination pursuant
to Section 11 of this Agreement, neither Shareholder nor the Company, nor any of
their respective officers, employees, or agents shall, directly or indirectly,
encourage, solicit, initiate, or enter into any discussions or negotiations
concerning any disposition of any of the membership interests or all or
substantially all of the assets of the Company (other than pursuant to this
Agreement), or any proposal therefor, or furnish or cause to be furnished any
information concerning the Company to any party in connection with any
transaction involving the acquisition of the membership interests or assets of
the Company by any person other than Netivation. Shareholder or the Company
will promptly inform Netivation of any inquiry (including the terms thereof and
the person making such inquiry) received by any responsible officer of the
Company or Shareholder after the date hereof and believed by such person to be a
bona fide, serious inquiry relating to any such proposal.
5.4 Action After the Closing. Upon the reasonable request of any
party hereto after the Closing, any other party will take all action and will
execute all documents and instruments necessary or desirable to consummate and
give effect to this merger. These include, by way of illustration and not by way
of limitation, the following:
5.4.1 Various conditions relating to filing, payment, and
collecting of refunds relating to taxes;
5.4.2 [Intentionally omitted];
5.4.3 Provisions relating to delivery of Company books and
records;
5.4.4 Provisions relating to treatment of confidential
proprietary information obtained in the merger process; and if Netivation is
concerned that Shareholder is not getting company approval in due time (or vice
versa), the following covenant may be considered.
5.5 Access to Records. Pending the Closing, Shareholder and the
Company will give Netivation, or its agents or representatives, access to the
books, records, and assets of the Company.
5.6 Reorganization. Neither the Company nor Shareholder has taken, or
will take any action after the date hereof, reasonably knowing that it has
caused, or will cause the Merger to fail to qualify as a tax-free reorganization
under the provisions of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code.
Neither the Company nor any Shareholder has failed to take, or will
AGREEMENT AND PLAN OF MERGER - 15
fail to take, any action reasonably knowing that it would have caused or will
cause the Merger to qualify as a tax-free reorganization under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Code.
6. [Intentionally Blank.]
7. Netivation's Covenants.
7.1 Capital Infusion. During the twelve-month period commencing
on the Closing, Netivation shall provide Five Hundred Thousand Dollars
($500,000) to the Netivation Sub for its working capital requirements. The Five
Hundred Thousand Dollars ($500,000) need not be infused all at once, and
Netivation's board of directors shall determine the times at which infusions
will be made.
7.2 Reorganization. Neither Netivation nor any of its subsidiaries
has taken, or will take any action after the date hereof, reasonably knowing
that it has caused, or will cause the Merger to fail to qualify as a tax-free
reorganization under the provisions of Sections 368(a)(1)(A) and 368(a)(2)(D) of
the Code. Neither Netivation nor any of its subsidiaries has failed to take, or
will fail to take, any action reasonably knowing that it would have caused or
will cause the Merger to qualify as a tax-free reorganization under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Code.
8. Conditions Precedent to the Obligations of Netivation. Each and
every obligation of Netivation under this Agreement is subject to the
satisfaction, at or before the Closing, of each of the following conditions:
8.1 Representations and Warranties; Performance. Each of the
representations and warranties made by the Company and Shareholder herein will
be true and correct in all material respects as of the Closing with the same
effect as though made at that time except for changes contemplated, permitted,
or required by this Agreement; Shareholder and the Company will have performed
and complied with all agreements, covenants, and conditions required by this
Agreement to be performed and complied with by them prior to the Closing; and
Netivation will have received, at the Closing, a certificate of the Company and
Shareholder, in the form attached hereto as Exhibit 8.1, stating that each of
the representations and warranties made by the Company and Shareholder herein
are true and correct in all material respects as of the Closing except for
changes contemplated, permitted, or required by this Agreement and that
Shareholder and the Company have performed and complied with all agreements,
covenants, and conditions required by this Agreement to be performed and
complied with by them prior to the Closing.
8.2 Litigation. No material action, suit, or proceeding before any
court, governmental or regulatory authority will have been commenced and be
continuing, and no investigation by any governmental or regulatory authority
will have been commenced and be continuing, and no action, investigation, suit,
or proceeding will be threatened at the time of Closing, against Shareholder,
the Company, or Netivation or any of their affiliates, associates, officers, or
AGREEMENT AND PLAN OF MERGER - 16
directors, seeking to restrain, prevent, or change this purchase, questioning
the validity or legality of this purchase, or seeking damages in connection with
this purchase.
8.3 Legal Opinion. Netivation will have received an opinion of
Shareholder's legal counsel, in substantially the form attached hereto as
Exhibit 8.3.
8.4 Material Change. From the date of this Agreement to the
Closing, the Company shall not have suffered any material adverse change
(whether or not such change is referred to or described in any supplement to any
Exhibit or Schedule to this Agreement) in its business prospects, financial
condition, working capital, assets, liabilities (absolute, accrued, contingent,
or otherwise), or operations.
8.5 [Intentionally Blank.]
8.6 [Intentionally Blank.]
8.7 [Intentionally Blank.]
8.8 Employment Agreement. An employment agreement in the form
attached hereto as Exhibit 8.8 shall have been entered into with Shareholder.
9. Conditions Precedent to the Obligations of the Company and
Shareholder. Each and every obligation of Shareholder and the Company under
this Agreement is subject to the satisfaction, at or before the Closing, of each
of the following conditions:
9.1 Representations and Warranties; Performance. Each of the
representations and warranties made by Netivation herein will be true and
correct in all material respects as of the Closing with the same effect as
though made at that time except for changes contemplated, permitted, or required
by this Agreement; Netivation will have performed and complied with all
agreements, covenants, and conditions required by this Agreement to be performed
and complied with by it prior to the Closing; and Shareholder will have
received, at the Closing, a certificate of Netivation, signed by the President
of Netivation, in the form attached hereto as Exhibit 9.1, stating that each of
the representations and warranties made by Netivation herein is true and correct
in all material respects as of the Closing except for changes contemplated,
permitted, or required by this Agreement and that Netivation has performed and
complied with all agreements, covenants, and conditions required by this
Agreement to be performed and complied with by it prior to the Closing.
9.2 No Proceeding or Litigation. No action, suit, or proceeding
before any court (other than suits seeking monetary damages only and in the
aggregate sum of less than $10,000) and any governmental or regulatory authority
will have been commenced and be continuing, and no investigation by any
governmental or regulatory authority will have been commenced and be continuing,
and no action, investigation, suit, or proceeding will be threatened at the time
of Closing,
AGREEMENT AND PLAN OF MERGER - 17
against Shareholder, the Company, or Netivation or any of their affiliates,
associates, officers, or directors, seeking to restrain, prevent, or change this
purchase, questioning the validity or legality of this purchase, or seeking
damages in connection with this purchase.
9.3 Employment Agreement with Xxxx Xxxxx. Netivation shall have
offered to employ Xxxx Xxxxx on the terms of the form attached hereto as Exhibit
9.3.
10. Deliveries Upon Signing; Closing.
10.1 Netivation's Deliveries. Upon the execution of this
Agreement, Netivation shall deliver the following:
A. to Shareholder, a copy, certified by an officer of Netivation
and Netivation Sub, of the resolutions of Netivation and Netivation Sub
authorizing the execution, delivery, and performance of this Agreement; and
B. to Shareholder, Seventy-Five Thousand Dollars ($75,000)
in immediately available funds.
10.2 Shareholder's Deliveries. Upon the execution of this
Agreement, Shareholder shall deliver to Netivation the following:
A. the certificate of formation and all amendments thereto and
restatements thereof of the Company certified by the official having custody
over corporate records in the jurisdiction of the Company's organization;
B. the current operating agreement and minutes of all meetings
and consents of members of the Company;
C. each certificate of qualification to do business as a foreign
entity of the Company;
D. all membership interest transaction records of the Company;
E. a certificate of the Secretary or equivalent officer of the
Company as to the accuracy, currency, and completeness of each of the above
documents, the incumbency and signatures of officers of the Company, the absence
of any amendment to the charter documents of the Company, and the absence of any
proceeding for dissolution or liquidation of the Company; and
F. Uniform Commercial Code, judgment and lien searches from the
appropriate county and state agencies showing all liens against assets, which
searches shall be conducted not more than ten (10) days prior to the execution
of this Agreement.
AGREEMENT AND PLAN OF MERGER - 18
10.3 Pre-closing Certificates. At any time prior to the Closing
as Netivation's managing underwriter may request, Netivation shall deliver to
Shareholder a certificate in the form of Exhibit 10.3A attached hereto and the
Company and Shareholder shall deliver to Netivation a certificate in the form of
Exhibit 10.3B attached hereto.
10.4 Time, Place, and Manner of Closing. Unless this Agreement
has been terminated and this purchase has been abandoned pursuant to the
provisions of Section 11, the closing ("Closing") will be held at the offices of
Xxxxxxx, Xxxxxx, Xxxxxxx, Rock & Fields, Chtd. at Boise, Idaho, or such other
place as the parties may agree, on the date of and simultaneously with the
effectiveness of Netivation's IPO.
10.4.1 Netivation's Deliveries. At Closing, Netivation
shall deliver to Shareholder the following:
A. the Netivation Stock;
B. One Hundred Seventy-five Thousand Dollars ($175,000) in
immediately available funds;
C. a duly executed counterpart of the Employment,
Confidentiality and Noncompetition Agreement, the form of which is attached
hereto as Exhibit 8.8, dated as of Closing with a Term (as that term is defined
in said agreement) commencing as of the date of Closing and ending two (2) years
from the date of Closing; and
D. a duly executed counterpart of the Employment,
Confidentiality and Noncompetition Agreement, the form of which is attached
hereto as Exhibit 9.3, dated as of Closing with a Term (as that term is defined
in said agreement) commencing as of the date of Closing and ending two (2) years
from the date of Closing;
E. the certificate contemplated by Section 9.1; and
F. The Idaho Articles of Merger duly executed by Netivation
Sub.
10.4.2 Shareholder's and Company's Deliveries. At Closing,
Shareholder or the Company or both, as applicable, shall deliver to Netivation
the following:
A. the Delaware Certificate of Merger duly executed by the
Company;
B. a duly executed counterpart of the Employment,
Confidentiality and Noncompetition Agreement, the form of which is attached
hereto as Exhibit 8.8, dated as of Closing with a Term (as that term is defined
in said agreement) commencing as of the date of Closing and ending two (2) years
from the date of Closing;
AGREEMENT AND PLAN OF MERGER - 19
C. the opinion of Shareholder's and the Company's counsel
contemplated by Section 8.3; and
D. the certificate contemplated by Section 8.1.
11. Remedies for Breach; Termination.
11.1 Netivation's Remedies upon Breach by Company or Shareholder.
If either the Company or Shareholder shall breach or fail to perform any of
their respective representations, warranties, covenants or obligations
hereunder, then Netivation may (1) waive such default and proceed to Closing,
(2) seek any and all relief available to Netivation at law or at equity,
including but not limited to specific performance, or (3) terminate this
Agreement.
11.2 Termination by Shareholder for Cause. If, pursuant to the
provisions of Section 9 of this Agreement, Shareholder is not obligated at the
Closing to consummate this Agreement, then Shareholder may terminate this
Agreement.
11.3 Termination Without Cause. Anything herein or elsewhere to
the contrary notwithstanding, this Agreement may be terminated and abandoned at
any time without further obligation or liability on the part of any party in
favor of any other only by mutual consent of Netivation and Shareholder.
11.4 Termination Procedure. Any party having the right to
terminate this Agreement pursuant to Section 11.1 or 11.2 may terminate this
Agreement by delivering to the other party written notice of termination prior
to the Closing, and thereupon, this Agreement will be terminated without
obligation or liability of any party.
11.5 Non-Consummation of IPO. If Netivation has not consummated
the IPO within two hundred seventy (270) days (or the next business day
thereafter if such date is a Saturday, Sunday, or a holiday) from the date of
this Agreement, then this Agreement shall be terminated without obligation or
liability of any party. Netivation and Shareholder agree and acknowledge that
nothing in this Agreement shall impose upon Netivation any obligation to
consummate, or to expend any effort to consummate, the IPO.
11.6 No Refund of Seventy-Five Thousand Dollars. The Seventy-
five Thousand Dollars ($75,000) cash paid to Shareholder upon signing this
Agreement pursuant to Section 1.5 shall not be refundable after signing this
Agreement.
12. Indemnification.
12.1 Indemnification by Shareholder. Subject to the limitations
and procedures set forth in this Section 12, the Company and the Shareholder
shall jointly and severally indemnify and hold harmless Netivation from and
against all losses, claims, demands, damages,
AGREEMENT AND PLAN OF MERGER - 20
liabilities, obligations, costs and/or expenses, including, without limitation,
reasonable fees and disbursements of counsel (hereinafter referred to
collectively as "Damages"), which are sustained or incurred by Netivation, to
the extent that such Damages are sustained or incurred by reason of (a) the
breach of any of the obligations, covenants, or provisions of, or the breach of
any of the representations or warranties made by, the Company or the Shareholder
in this Agreement; or (b) any claim, dispute, action, suit, investigation, or
proceeding set forth in any of Company's disclosure schedules. The foregoing
notwithstanding, from and after the Closing, Shareholder shall be solely
responsible for any indemnification due under this Section 12.1 and shall have
no right to seek contribution or indemnification from the Company.
12.2 Indemnification by Netivation. Subject to the limitations
and procedures set forth in this Section 12, Netivation shall indemnify and hold
harmless the Shareholder from and against any and all Damages sustained or
incurred by the Shareholder, to the extent such Damages are sustained or
incurred by the Shareholder by reason of the breach of any of the obligations,
covenants, or provisions of, or the breach of any of the representations or
warranties made by, Netivation in this Agreement.
12.3 Survival of Representations and Warranties; Liability Cap.
The representations and warranties of the parties contained herein shall survive
for a period of two (2) years after the Closing. Any claim that any party may
have at any time against another party for a breach of any such representation
or warranty, whether known or unknown, which is not asserted by written notice
to the breaching party within such two (2) year period shall not be valid or
effective, and the party against whom such claim is asserted shall have no
liability with respect thereto. Furthermore, the maximum amount for which any
single party shall be liable for any and all breaches of representations and
warranties shall be Two Hundred Fifty Thousand Dollars ($250,000) in the
aggregate.
12.4 Procedure for Indemnification. In the event that any party
to this Agreement shall incur any Damages in respect of which indemnification
may be sought by such party pursuant to this Section 12 or any other provision
of this Agreement, the party indemnified hereunder (the "Indemnitee") shall
notify the party providing indemnification (the "Indemnitor") promptly. In the
case of third party claims, such notice shall in any event be given within 10
days of the filing or assertion of any claim against the Indemnitee stating the
nature and basis of such claim; provided, however, that any delay or failure to
notify any Indemnitor of any claim shall not relieve it from any liability
except to the extent that the Indemnitor demonstrates that the defense of such
action has been materially prejudiced by such delay or failure to notify. In
the case of third party claims, the Indemnitor shall, within 10 days of receipt
of notice of such claim, notify the Indemnitee of its intention to assume the
defense of such claim. If the Indemnitor assumes the defense of the claim, the
Indemnitor shall have the right and obligation (a) to conduct any proceedings or
negotiations in connection therewith and necessary or appropriate to defend the
Indemnitee, (b) to take all other required steps or proceedings to settle or
defend any such claims, and (c) to employ counsel to contest any such claim or
liability in the name of the Indemnitee or otherwise. If the Indemnitor shall
not assume the defense of any such claim or litigation resulting therefrom, the
Indemnitee may defend
AGREEMENT AND PLAN OF MERGER - 21
against any such claim or litigation in such manner as it may deem appropriate
and the Indemnitee may settle such claim or litigation on such terms as it may
deem appropriate, and assert against the Indemnitor any rights or claims to
which the Indemnitee is entitled. Payment of Damages shall be made within 10
days of a final determination of a claim.
A final determination of a disputed claim shall be (a) a judgment of any
court determining the validity of disputed claim, if no appeal is pending from
such judgment or if the time to appeal therefrom has elapsed, (b) an award of
any arbitration determining the validity of such disputed claim, if there is not
pending any motion to set aside such award or if the time within to move to set
such award aside has elapsed, (c) a written termination of the dispute with
respect to such claim signed by all of the parties thereto or their attorneys,
(d) a written acknowledgment of the Indemnitor that it no longer disputes the
validity of such claim, or (e) such other evidence of final determination of a
disputed claim as shall be acceptable to the parties.
12.5 Exclusive Remedy for Monetary Damages. The remedies provided in
this Section 12 shall be Netivation's exclusive remedies for any and all
monetary damages arising out of any breach of any representation or warranty or
breach of any covenant or agreement by Shareholder or the Company hereunder or
any claims by third parties for which the Company or Shareholder has agreed to
indemnify Netivation. The foregoing shall not be construed as a waiver or
limitation upon any rights or remedies of Netivation other than with respect to
monetary damages.
13. Securities Law Matters.
13.1 Investor Representations. In connection with the issuance of the
Netivation Stock to the Shareholder (as provided in Section 1.2), the
Shareholder represents and warrants as follows:
13.1.1 Shareholder (i) will acquire and hold the Netivation Stock
solely for his own account, as principal, for investment purposes only, and not
with a view to, or for resale, distribution, or fractionalization of all or any
part of the Netivation Stock and (ii) have no present intention, agreement, or
arrangement to divide his participation with others or to resell, assign,
transfer, or otherwise dispose of all or any part of the Netivation Stock.
13.1.2 In making his decision to receive the Netivation Stock
as part of the purchase price, Shareholder has evaluated the risk of investing
in the Netivation Stock and is acquiring the Netivation Stock based only upon
his independent examination and judgment as to the prospects of Netivation as
determined from information obtained directly by Shareholder from Netivation.
Shareholder acknowledges receipt of all information requested of Netivation.
The Netivation Stock was not offered to Shareholder by means of publicly
disseminated advertisements or sales literature, nor is Shareholder aware of any
offers made to other persons by such means.
13.1.3 Shareholder has been given the opportunity (i) to ask
questions of, and receive answers from, Netivation concerning the terms and
conditions of the issuance of the
AGREEMENT AND PLAN OF MERGER - 22
Netivation Stock and other matters pertaining to this investment and all such
questions have been answered to the satisfaction of Shareholder; and (ii) to
obtain such additional information necessary to verify the accuracy of the
information or materials provided to Shareholder, except such information which
Netivation has indicated it either does not possess and cannot acquire without
unreasonable effort or expense or which is proprietary and confidential.
13.2 Disposition of Shares. Shareholder represents and warrants that
the Netivation Stock is being acquired and will be acquired for his own account
and will not be sold or otherwise disposed of except pursuant to (i) an
exemption or exclusion from the registration requirements under the 1933 Act,
which does not require the filing by Netivation with the SEC of any registration
statement, offering circular or other document, in which case Shareholder shall
first supply to Netivation an opinion of counsel (which opinion of counsel shall
be satisfactory to Netivation) that such exemption or exclusion is available, or
(ii) a registration statement filed by Netivation with the SEC under the 1933
Act.
13.3 Legend. The certificates for the Netivation Stock received
by Shareholder shall bear the following legend:
The Shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, and may not be sold, transferred,
or otherwise disposed of by the holder without an effective registration
statement being filed under and pursuant to said Act or receipt of an
opinion of counsel in form and substance satisfactory to the issuer that
an exemption from registration is available.
and Netivation may, unless a registration statement covering such shares is in
effect, place stop transfer orders with its transfer agents with respect to such
certificates.
14. Miscellaneous Provisions.
14.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified, or supplemented only by a written agreement
signed by Netivation and Shareholder.
14.2 Waiver of Compliance; Consents.
14.2.1 Any failure of any party to comply with any obligation,
covenant, agreement, or condition herein may be waived by the party entitled to
the performance of such obligation, covenant, or agreement or who has the
benefit of such condition, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement, or condition will not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
AGREEMENT AND PLAN OF MERGER - 23
14.2.2 Whenever this Agreement requires or permits consent by
or on behalf of any party hereto, such consent will be given in a manner
consistent with the requirements for a waiver of compliance as set forth above.
14.3 Notices. All notices, requests, demands, and other
communications required or permitted hereunder will be in writing and will be
deemed to have been duly given when delivered by hand or three days after being
mailed by certified or registered mail, return receipt requested, with postage
prepaid:
If to Netivation, or to the Company after the Closing, to:
Xxxxxxxxxx.xxx, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxx x'Xxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx
Copy to:
Xxxxxxx, Xxxxxx, Xxxxxxx, Rock & Fields
000 X. Xxxxxxx Xxxx., 00xx Xxxxx
Xxxx Xxxxxx Xxx 000
Xxxxx, Xxxxx 00000-0000
Attention: Xxxx Xxxxxxx
or to such other person or address as Netivation furnishes to Shareholder
pursuant to the above.
If to the Company before the Closing or to Shareholder, to:
The Online Medical Bookstore, LLC
c/o Xx. Xxxxxx X. Xxxxx, M.D.
00 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Copy to:
Xxxxxx, Gesmar & Xxxxxxxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxx
or to such other address as the Company or Shareholder furnishes to Netivation
pursuant to the above.
AGREEMENT AND PLAN OF MERGER - 24
14.4 Titles and Captions. All section titles or captions
contained in this Agreement are for convenience only and shall not be deemed
part of the context nor effect the interpretation of this Agreement.
14.5 Entire Agreement. This Agreement contains the entire
understanding between and among the parties and supersedes any prior
understandings and agreements among them respecting the subject matter of this
Agreement, and the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by each party hereto and their
respective heirs, executors, administrators, successors, and assigns.
14.6 Severability. All agreements and covenants contained herein
are severable, and in the event any of them should be held to be invalid by a
court of competent jurisdiction, this Agreement shall be interpreted and
enforced as if such invalid agreements or covenants were not contained herein.
In the event the territory or length of the covenant not to compete is
determined by a court to be too broad, the court shall redefine the territory
and length to be as broad as possible.
14.7 Assignment. Neither this Agreement nor any other rights or
obligations under this Agreement may be assigned by any party hereto without the
prior written consent of all parties to the Agreement. Subject to the
foregoing, this Agreement shall be binding upon the heirs, executors,
administrators, successors, and assigns of the parties hereto.
14.8 Attorney Fees. In the event an arbitration, suit or action
is brought by any party under this Agreement to enforce any of its terms, or in
any appeal therefrom, it is agreed that the prevailing party shall be entitled
to reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
14.9 Pronouns and Plurals. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular,
or plural as the identity of the person or persons may require.
14.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of Idaho without regard to
conflicts of law principles.
14.11 Arbitration. The parties shall attempt in good faith to
resolve any controversy or claim arising out of or relating to this Agreement,
or the breach, termination, or validity thereof (a "Dispute") promptly by
negotiation between the parties. If a Dispute has not been resolved within 30
days by negotiation, the parties shall attempt to mediate the Dispute through
the selection of a mutually agreeable mediator who shall conduct such mediation
in confidence. If a Dispute is not resolved by mediation, then the Dispute
shall be settled by arbitration by a sole arbitrator in accordance with the
Commercial Rules of the American Arbitration Association, and governed by the
United States Arbitration Act, 9 U.S.C. (S)(S) 1-16, except as otherwise
provided herein. Judgment upon the award rendered by the arbitrator may be
entered by any court having
AGREEMENT AND PLAN OF MERGER - 25
jurisdiction thereof. The place of arbitration shall be Boise, Idaho if
Shareholder commences arbitration and shall be Boston, Massachusetts if
Netivation commences arbitration. Each party shall be responsible for his own
attorney fees incurred during any phase of dispute resolution. The arbitrator
shall apply the law to the dispute in the same manner as a judge were the
dispute before a court of law of the state of Idaho. The arbitrator shall have
the authority to award any remedy or relief that a court of the state of Idaho
could order or grant, including, without limitation, specific performance of any
obligation created under the Agreement, the issuance of an injunction, or the
imposition of sanctions for abuse or frustration of the arbitration process.
Notwithstanding the foregoing, the arbitrator shall not have authority to award
punitive damages. The parties shall take all reasonable steps necessary to
conduct a hearing no later than 45 days after submission of the matter to
arbitration. The arbitrator shall render his decision within 15 days after the
close of the arbitration hearing. The arbitration award shall be in writing and
shall specify the factual and legal bases for the award.
14.12 Counterparts; Fax Signatures. This Agreement may be
executed in one or more counterparts, each of which together shall constitute a
single instrument. Signatures on this Agreement transmitted by facsimile shall
be deemed to be original signatures for all purposes of this Agreement.
14.13 No Finders or Brokers. There shall be no finder's or
broker's fees due from Netivation as a result of this Agreement.
14.14 Sales Tax. The Company before the Closing, and/or
Shareholder will be responsible for and will pay any sales tax payable as a
result of the execution or consummation of this Agreement.
14.15 Survival of Warranties. All representations and warranties
in this Agreement will survive the Closing and will be deemed to have been
relied upon, notwithstanding any investigation made by any of the parties or on
their behalf.
IN WITNESS WHEREOF, the undersigned have executed this Agreement the day
and year set forth above.
XXXXXXXXXX.XXX, INC.,
a Nevada corporation
By /s/ Xxxxxxx X. Xxxxxx
______________________________________
Xxxxxxx X. Xxxxxx, President
AGREEMENT AND PLAN OF MERGER - 26
THE ONLINE MEDICAL
BOOKSTORE, LLC, a Delaware limited liability
company
By /s/ Xx. Xxxxxx X. Xxxxx
________________________________________________
Xx. Xxxxxx X. Xxxxx, M.D., Shareholder
/s/ Xx. Xxxxxx X. Xxxxx
__________________________________________________
Xx. Xxxxxx X. Xxxxx, M.D., Individually as
Shareholder
THE ONLINE MEDICAL BOOKSTORE, INC.,
an Idaho corporation
By /s/ Xxxxxxx X. Xxxxxx
________________________________________________
Xxxxxxx X. Xxxxxx, President
AGREEMENT AND PLAN OF MERGER - 27
EXHIBIT 1.1.1
Form of Delaware Certificate of Merger
CERTIFICATE OF MERGER OF
THE ONLINE MEDICAL BOOKSTORE, LLC
a Delaware limited liability company
WITH AND INTO
THE ONLINE MEDICAL BOOKSTORE, INC.
an Idaho corporation
The Online Medical Bookstore, Inc., an Idaho corporation, DOES HEREBY
CERTIFY AS FOLLOWS in accordance with Section 209(c) of the Delaware Limited
Liability Company Act:
1: The names of the business entities proposing to merge and the states
under which such entities are organized are as follows:
Name of Entity State of Organization
-------------- ---------------------
The Online Medical Bookstore, Inc. ("Corporation") Idaho
The Online Medical Bookstore, LLC ("LLC") Delaware
2: An Agreement and Plan of Merger has been adopted, approved, certified,
executed and acknowledged by Corporation and LLC in accordance with the Delaware
Limited Liability Company Act and the Idaho Business Corporation Act.
3: The name of the surviving corporation shall be "The Online Medical
Bookstore, Inc." The surviving corporation shall be governed by the laws of the
State of Idaho.
4: The executed Agreement and Plan of Merger is on file at the principal
place of business of Corporation. The address of said principal place of
business is 0000 Xxxxxxxxxx Xxx, Xxxxx x'Xxxxx, Xxxxx 00000.
5: A copy of the Agreement and Plan of Merger will be furnished on request
and without cost to any shareholder of Corporation or member of LLC.
6: Corporation agrees that it may be served with process in the State of
Delaware in any action, suit or proceeding for the enforcement of any obligation
of LLC and irrevocably appoints the
EXHIBIT 1.1.1
Secretary of State of Delaware as its agent to accept service of process in any
such action, suit or proceeding. The address to which a copy of such process
shall be mailed to Corporation by the Secretary of State of Delaware is 0000
Xxxxxxxxxx Xxx, Xxxxx x'Xxxxx, Xxxxx 00000.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Executed and verified as of the _____ day of _________, 1999.
THE ONLINE MEDICAL BOOKSTORE, INC.
an Idaho corporation
By:_______________________________________________
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
ATTEST:
_______________________________
Xxxx Xxxxxx
Secretary
THE ONLINE MEDICAL BOOKSTORE, LLC
a Delaware limited liability company
By:_______________________________________________
Xxxxxx X. Xxxxx, M.D., its sole member
EXHIBIT 1.1.1
EXHIBIT 1.1.2
Form of Idaho Articles of Merger
ARTICLES OF MERGER OF
THE ONLINE MEDICAL BOOKSTORE, LLC
a Delaware limited liability company
WITH AND INTO
THE ONLINE MEDICAL BOOKSTORE, INC.
an Idaho corporation
1. The names of the business entities proposing to merge and the states
under which such entities are organized are as follows:
Name of Entity State of Organization
-------------- ---------------------
The Online Medical Bookstore, Inc. ("Corporation") Idaho
The Online Medical Bookstore, LLC ("LLC") Delaware
2. The Agreement and Plan of Merger, attached hereto and incorporated
herein, has been adopted, approved, certified, executed and acknowledged by
Corporation and LLC in accordance with the Delaware Limited Liability Company
Act and the Idaho Business Corporation Act.
3. The Agreement and Plan of Merger was approved by the unanimous consent
of the sole member of LLC.
4. The number of the Corporation's shares outstanding at the time of such
approval was 100 shares, and the number of shares entitled to vote thereon was
100. The number of shares voted for the Agreement and Plan of Merger was 100
and the number of shares voted against the Agreement and Plan of Merger was 0.
The number of votes cast for the Agreement and Plan of Merger was sufficient for
approval by the owners of the common stock of Corporation.
Dated as of the_____ day of _________, 1999.
EXHIBIT 1.1.2
THE ONLINE MEDICAL BOOKSTORE, INC.
By:_______________________________________________
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
THE ONLINE MEDICAL BOOKSTORE, LLC
By:_______________________________________________
Xxxxxx X. Xxxxx, M.D., its sole member
EXHIBIT 1.1.2
EXHIBIT 1.4.3
Directors and Officers of the Surviving Corporation
Directors: Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Chairman of the Board of Directors,
President and Chief Executive Officer: Xxxxxxx X. Xxxxxx
Chief Operating Officer, Secretary
and Treasurer: Xxxx X. Xxxxxx
EXHIBIT 1.4.3
EXHIBIT 2.5(A)
Unaudited Balance Sheet as of December 31, 1998
See attached.
EXHIBIT 2.5(A)
EXHIBIT 2.5(B)
Unaudited Income Statement for the Period Ending December 31, 1998
See attached.
EXHIBIT 2.5(B)
EXHIBIT 8.1
Form of Certificate of the Company and Shareholder
CERTIFICATE OF REPRESENTATIONS AND WARRANTIES
I, XX. XXXXXX X. XXXXX, certify that I am the sole Shareholder of THE
ONLINE MEDICAL BOOKSTORE, LLC, a Delaware limited liability company, and that
the representations and warranties of the undersigned and The Online Medical
Bookstore, LLC contained in the Agreement and Plan of Merger dated as of March
___, 1999, among The Online Medical Bookstore, LLC, Xx. Xxxxxx X. Xxxxx, M.D.,
Xxxxxxxxxx.xxx, Inc. and The Online Medical Bookstore, Inc. (the "Merger
Agreement") are true and correct in all material respects as of the date of this
Certificate. I also certify that the undersigned and The Online Medical
Bookstore, LLC have performed and complied with all agreements, covenants, and
conditions required by the Merger Agreement to be performed and complied with by
each of them prior to the date of this Certificate.
DATED this ___ day of _________, 1999.
THE ONLINE MEDICAL BOOKSTORE, LLC
By________________________________________________
Xx. Xxxxxx X. Xxxxx, President
__________________________________________________
Xx. Xxxxxx X. Xxxxx, individually
EXHIBIT 8.1
EXHIBIT 8.3
Form of Legal Opinion
________________, 1999
Xxxxxxxxxx.xxx, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxx x'Xxxxx, Xxxxx 00000
The OnLine Medical Bookstore, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxx x'Xxxxx, Xxxxx 00000
Ladies and Gentlemen:
We have acted as counsel for The Online Medical Bookstore, LLC, a Delaware
limited liability company (the "Company") and Dr. Xxxxxx Xxxxx ("Xx. Xxxxx"), in
connection with the Agreement and Plan of Merger, dated as of March 4, 1999
(together with the exhibits, attachments and schedules thereto, the "Merger
Agreement"), by and among each of you, the Company and Xx. Xxxxx, and the
transactions contemplated thereby. Unless otherwise defined herein, capitalized
terms used in this letter shall have the meanings ascribed to them in the Merger
Agreement.
In so acting, we have examined copies of the following documents:
(i) the Merger Agreement;
(ii) A certificate of the Secretary of State of the State of Delaware,
dated _______________, 1999, as to the legal existence and good standing of the
Company (the "Good Standing Certificate");
(iii) Originals or copies of (a) the Certificate of Formation of the
Company, in the form certified by the Secretary of State of Delaware on
_______________ (the "Charter"), and (b) certificate of Xx. Xxxxx, as the sole
member of the Company certifying as to certain matters set forth therein,
including without limitation, the Operating Agreement of the Company, the
minutes and consents of the sole member relating to the transactions
contemplated by the Merger Agreement and signatures and incumbency of the
authorized signatory executing the Merger Agreement on behalf of the Company
(the "Member's Certificate"); and
(iv) such certificates or comparable documents of public officials as we
have deemed relevant and necessary as a basis for the opinions set forth herein
(together with the Member's Certificate, the "Certificates").
EXHIBIT 8.3
Insofar as this opinion relates to factual matters, we have relied (without
independent investigation) entirely upon the Certificates and upon the
representations and warranties of the Company and Xx. Xxxxx set forth in the
Merger Agreement. Our opinion set forth in paragraph 1 below as to the legal
existence and good standing of the Company is based solely upon our review of
the Good Standing Certificate.
Our representation of the Company and Xx. Xxxxx has been limited to those
matters as to which we were consulted by the Company and Xx. Xxxxx and there may
also exist matters of a legal nature with respect to which we have not been
consulted and of which we are not aware.
Although we have made inquiries of the Company and Xx. Xxxxx with respect to the
matters discussed in this opinion and relied upon the representations referred
to above, we have not made any docket search or other independent investigation
in connection with this opinion, including without limitation any independent
investigation as to the existence of actions, suits, investigations or
proceedings, if any, pending or threatened against the Company.
Where an opinion is qualified as being to our knowledge, such opinion is
based solely upon the actual, conscious knowledge of attorneys in this firm who
have given substantive attention to matters which are the subject of this
opinion, without due inquiry or investigation. The phrases "to our knowledge"
or "known to us" or the like, when used to qualify any statement relating to the
absence or lack of certain conditions or circumstances, shall be understood to
mean that we have no actual, conscious knowledge of anything which would
contradict the statement in question, but not to imply either that we know the
statement is true or complete or that we have made any independent investigation
of the matters addressed in the statement. "Actual knowledge" of documents is
based on review of only the documents which are stated in this opinion letter as
having been reviewed.
In all our examinations made in connection with this opinion, we have assumed
and relied upon: (i) the genuineness of original documents, (ii) the conformity
to original documents of all copies submitted to us as telecopies, photocopies
or conformed copies, (iii) the completeness of all documents furnished to us,
and that no amendments, modifications or revisions to such documents are in
existence, (iv) that the execution of all documents on behalf of all entities
and persons other than the Company and Xx. Xxxxx was duly authorized and that
such documents were validly executed and delivered on behalf of such entities
and persons other than the Company and Xx. Xxxxx, and that the agreed-upon
consideration has been paid therefor, (v) the continued validity and
effectiveness of any power of attorney pursuant to which any document is
executed, (vi) the competency and capacity of any signatories who are natural
persons. We have also assumed that all signature pages reviewed by us in
telecopy form are copies of signature pages which were attached to documents
identical in form to the copies of the same documents which were in our
possession.
You have not asked us to and we do not opine as to your compliance with any
federal or state law which may be applicable to you.
EXHIBIT 8.3
Our opinions in paragraphs 6 and 7 below as to capital structure, record
ownership and rights to acquire securities of the Company are based solely upon
our review of the Charter, the Operating Agreement and the matters stated in the
Member's Certificate.
The opinions hereinafter expressed are further qualified to the extent that the
validity, binding nature or enforceability of any provisions in the Merger
Agreement or in any document or instrument executed in connection therewith, or
of any rights granted to you pursuant to any of those instruments, may be
subject to and affected by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting the
rights of creditors generally, or (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding at law or in
equity). We render no opinion as to the availability of, or the effect of rules
of law governing, specific performance, injunctive relief or other equitable
remedies.
We render no opinion as to the laws of any jurisdictions other than the
Commonwealth of Massachusetts, the Delaware Limited Liability Company Act (the
"DLLCA") and the federal laws of the United States. We assume no responsibility
as to the applicability thereto or affect thereon of the laws of any other state
or jurisdiction. With respect to any matters concerning the DLLCA involved in
the opinions set forth herein, we draw your attention to the fact that we are
not admitted to the Bar in the State of Delaware and are not experts in the law
of such jurisdiction, and that any such opinions concerning the DLLCA are based
upon our reasonable familiarity with the DLLCA as a result of our prior
involvement in transactions involving such laws.
We render or imply no opinion with respect to (a) compliance with applicable
anti-fraud statutes, rules or regulations of applicable state or United States
law, including any such laws which relate to the accuracy or completeness of
disclosure, (b) the enforceability of any provision relating to the imposition
of any penalty, or (c) the enforceability of any provision regarding choice of
forum for resolution of disputes. We render or imply no opinion as to
compliance with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 or
similar laws and regulations, with bulk sales or similar laws and regulations or
with federal or state plant closing laws and regulations. We render no opinion
as to the enforceability of any provision regarding choice of law or conflicts
of law. We render no opinion as to the enforceability of any provisions
regarding waivers of any rights (including without limitation waivers of any
rights to set-offs), indemnification set forth in Section 12 of the Merger
Agreement, or the severability of obligations, to the extent any of the
foregoing are found to be contrary to public policy. The enforcement of any of
your rights may in all cases be subject to an implied duty of good faith.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. To our
knowledge, the Company is not required to qualify to do business as a foreign
corporation in any state of the United States where the failure to qualify would
be likely to have a material adverse effect on the Company.
EXHIBIT 8.3
2. The Company has the requisite power and authority under the Charter
and Operating Agreement sufficient to carry on its business as presently
conducted and to own and lease the properties it presently owns or leases.
3. The execution, delivery and performance by the Company of the Merger
Agreement, and the consummation by it of the transactions contemplated thereby,
have been duly and validly authorized by all necessary action on the part of the
Company. The Merger Agreement has been duly and validly executed and delivered
by the Company and constitutes the legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms. The
Merger Agreement has been validly executed and delivered by Xx. Xxxxx and
constitutes the legal, valid and binding agreement of Xx.Xxxxx, enforceable
against him in accordance with its terms.
4. The execution, delivery and performance by the Company of the Merger
Agreement, and the consummation by the Company of the transactions contemplated
thereby, will not (a) conflict with or result in any breach of any provision of
the Charter or the Operating Agreement of the Company, or (b) to our knowledge,
violate any judicial or governmental decree, order, judgment or injunction to
which the Company is a party or to which it or any of its assets is subject.
5. To our knowledge, there is no suit, arbitration or legal,
administrative or other proceeding or governmental investigation pending or
threatened against the Company, at law or in equity, (a) which purports to
affect the legality, validity or enforceability of the Merger Agreement, or (b)
which has had or could reasonably be expected to have a material adverse effect
on the operation by the Company of its properties and assets in the ordinary
course of business.
6. All membership interests of the Company are owned, beneficially and of
record, by Xx. Xxxxx. To our knowledge, there are no outstanding warrants,
options, commitments, preemptive rights, rights to acquire or purchase,
conversion rights or demands of any character relating to the membership
interests of the Company.
7. All of the outstanding membership interests of the Company are validly
issued, and based solely on our review of the Member's Certificate, are fully
paid and nonassessable.
This opinion is based upon currently existing statutes, rules and regulations
and judicial decisions, and we disclaim any obligation to advise you of any
change in any of these sources of law or subsequent legal or factual
developments which might affect any matters or opinions set forth herein. We
are opining only as to the matters expressly set forth herein, and no opinion
should be inferred as to any other matters.
EXHIBIT 8.3
This opinion is furnished to you solely in connection with the signing of the
Merger Agreement and related transactions thereto and may not be relied upon by
you for any other purpose or by any other person, entity or organization for any
purpose whatsoever.
Very truly yours,
XXXXXX, GESMER & XXXXXXXXX, LLP
EXHIBIT 8.3
EXHIBIT 8.8
Form of Employment Agreement with Xx. Xxxxx
EMPLOYMENT, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT
This Employment, Confidentiality and Noncompetition Agreement
("Agreement") is made and entered into effective the _____ day of
_______________, 1999, by and between XXXXXXXXXX.XXX, INC., a Nevada
corporation ("Employer"), and XX. XXXXXX X. XXXXX, M.D. ("Employee").
In consideration of their mutual promises and covenants contained
herein, the receipt and legal sufficiency of which consideration is hereby
acknowledged, the parties hereby agree as follows:
1. Employment. Employer shall employ Employee and Employee shall
work for Employer in the employment position described in Exhibit A hereto,
which is hereby incorporated herein and made a part of this Agreement. In this
position, Employee shall perform all reasonably assigned duties, comply with all
employment policies, and obey all rules, regulations and special instructions
that now exist or that may hereafter be reasonably established by Employer from
time to time consistent with Exhibit A. Employee shall render such services and
perform such duties as Employer shall reasonably direct. Employee may render
such services and perform such duties from any location in the continental
United States. Employee warrants that all information provided by Employee in
applying for employment is true and correct.
2. Standard of Performance. Employee accepts employment with
Employer on the terms and conditions herein set forth. Employee recognizes that
Employee owes to Employer duties of loyalty, fidelity and obedience in all
matters pertaining to such employment. Employee agrees to serve Employer
diligently and faithfully, to perform all duties hereunder to the best of
Employee's ability, and to devote four hundred (400) to six hundred (600) hours
per year to the conduct of Employer's business at such times as Employer shall
reasonably request. Employer acknowledges that Employee is a physician with
full-time obligations and may be unavailable from time to time.
3. Compensation. In consideration for the services of Employee
rendered to Employer pursuant to the terms of this Agreement, and subject to the
full performance of Employee's obligations hereunder, Employer shall pay
Employee according to the provisions of the Employer's compensation plan
described in Exhibit A hereto. Employee shall receive no compensation or
benefits, including but not limited to paid holidays, paid vacation and paid
health insurance, that is not set forth in Exhibit A hereto. Employee
understands that the compensation plan is subject to modification by the
Employer at any time. Notwithstanding anything to the
EXHIBIT 8.8
contrary in the Xxxxxxxxxx.xxx, Inc. 1999 Equity Incentive Plan (the "Plan"),
should Employer elect to repurchase any vested option shares pursuant to the
Plan, it shall do so at fair market value.
4. Term of Employment. Employee's term of employment under this
Agreement shall commence on the ____ day of ________, 1999, and shall continue
thereafter until the ____ day of_______, 2001 (the "Term"), unless otherwise
terminated in accordance with this Agreement.
A. Termination for Cause. During the Term, the Employer may
---------------------
terminate the employment of the Employee for "Cause" by giving the Employee
prior written notice of such termination, with reasonable specificity of the
details thereof. For the purposes of this Agreement, "Cause" shall include but
not be limited to (i) the Employee's willful disregard of lawful instructions of
the Employer's Board of Directors or Chief Executive Officer which are
consistent with the Employee's position and duties set forth herein; (ii) the
Employee's willful neglect of duties; (iii) the Employee's willful actions which
may reasonably be expected to result in material damage to the Employer; (iv)
the Employee's abuse of alcohol or other drugs or controlled substances; (v) the
Employee's material breach of any of the terms or conditions contained herein;
(vi) the conviction of the Employee of a felony; or (vii) the Employee's theft,
embezzlement or misappropriation of funds from the Employer. In addition,
except as specified in Section 4.B, Employee's resignation hereunder shall be
deemed a termination for Cause. A termination pursuant to Section 4.A(i), (ii),
(iii), (iv), or (v) shall take effect thirty (30) days after the giving of the
notice contemplated hereby unless the Employee shall during such thirty (30) day
period remedy to the reasonable satisfaction of the Board of Directors or Chief
Executive Officer the misconduct, disregard, abuse, or breach specified in such
notice. A termination pursuant to Section 4.A(vi) or (vii) shall take effect
immediately upon the giving of the notice contemplated hereby.
B. Termination Without Cause. A termination of the Employee's
-------------------------
employment shall be deemed to be "without Cause" as follows: (i) if the Employer
terminates the Employee's employment for any reason other than for Cause; (ii)
if the Employee resigns as a result of Employer's requesting the Employee to
perform duties inconsistent with the duties set forth herein, or impeding the
Employee's performance of duties consistent with the duties set forth herein,
and the Employer fails, within thirty (30) days after its receipt of written
notice thereof from the Employee, to modify to the reasonable satisfaction of
the Employee his duties in accordance with this Agreement; or (iii) if the
Employer breaches any of its material obligations under this Agreement or under
that certain Agreement and Plan of Merger among Employer, Employee, The Online
Medical Bookstore, LLC, and The Online Medical Bookstore, Inc., dated
________________, 1999 (the "Merger Agreement"), and the Employer fails, within
thirty (30) days after its receipt of written notice thereof from the Employee,
to cure such breach to the reasonable satisfaction of the Employee.
C. Effect of Termination of Employment
-----------------------------------
EXHIBIT 8.8
(i) Any Termination. Upon any termination of the Employee's
employment, the Employer shall pay the Employee:
(a) the unpaid portion of any accrued Base Salary described
in Exhibit A, computed on a pro rata basis to the date of termination; and
(b) reimbursement for any expenses payable pursuant to
Exhibit A for which the Employee shall not have theretofore been reimbursed.
(ii) Termination Without Cause: Severance. In addition to the
Employee's right to receive amounts described in Section 4.C(i), upon any
termination of the Employee's employment pursuant to Section 4.B and subject to
the Employee's continuing performance of any obligations which the Employee may
have under this Agreement or any other agreement with the Employer, which by
their terms survive any termination of employment (including without limitation
any nondisclosure, non-competition, or non-solicitation obligations), (A) the
Employee shall receive his Base Salary provided for in Exhibit A through the
later of (I) the end of the Term or (II) six (6) months following termination,
payable on the same dates as provided for in Exhibit A; and (B) the stock
options described in Exhibit A shall continue to vest under the terms thereof as
if Employee remained employed for the entire Term.
5. Confidential Information.
A. Definition of Confidential Information. Employer is in the
business of designing, creating, perfecting, marketing, distributing, selling
and servicing computer software, and has built up an established and extensive
trade and reputation in the industry. Employer has developed and continues to
develop commercially valuable technical and non-technical information
("Confidential Information") that is proprietary and confidential and/or
constitutes Employer's "trade secrets" within the meaning of the Idaho Trade
Secrets Act, Idaho Code sections 48-801 through 48-807. Such Confidential
Information, which is vital to the success of Employer's business, includes, but
is not necessarily limited to: programs, computer programs, system
documentation, data compilations, manuals, methods, techniques, processes,
patented and/or unpatented technology, research, know-how, development, designs,
devices, inventions, the identities of customers, prospective customers,
suppliers and prospective suppliers, contracts with suppliers and customers,
sales proposals, methods of sales, marketing research and data, pricing
policies, cost information, financial information, business plans, specialized
requests of Employer's customers, and other materials and documents developed by
Employer. Confidential Information also includes special hardware, product
hardware, related software and related documentation, either owned by Employer
or in Employer's possession under an agreement of nondisclosure. Through
Employee's employment, Employee may become acquainted with or contribute to the
Employer's Confidential Information through inventions, discoveries,
improvements, software development, and/or in other ways.
EXHIBIT 8.8
B. Employee Access to Confidential Information. Employee agrees: (a)
to access only such Confidential Information as is necessary to perform
Employee's job function; (b) to allow access to Confidential Information under
Employee's control to only those of Employee's co-employees whose job functions
for Employer necessitate access to such Confidential Information; and (c) to
allow such co-employees to access only such Confidential Information under
Employee's control as is necessary to the co-employee's performance of his/her
job functions for Employer.
C. Nondisclosure of Confidential Information. Employee shall not, at
any time, either during or subsequent to employment, directly or indirectly,
appropriate, disclose or divulge any Confidential Information to any person not
then employed by Employer, unless authorized or directed by Employer. If
Employer authorizes or directs Employee to disclose Confidential Information to
any such third party, Employee must ensure that a signed confidentiality
agreement is or has been obtained from the third party to whom Confidential
Information is being disclosed and that all Confidential Information so
disclosed is clearly marked "Confidential."
D. Return of Confidential and Other Information. All Confidential
Information provided to Employee, and all documents and things prepared by
Employee in the course of Employee's employment, including but not necessarily
limited to correspondence, drawings, blueprints, manuals, letters, notes, lists,
notebooks, reports, flow-charts, computer programs, proposals, DayTimers,
planners, calendars, schedules, discs, data tapes, financial plans and
information, business plans, and other documents and records, whether in hard
copy, magnetic media or otherwise, and any and all copies thereof, are the
exclusive property of Employer and shall be returned immediately to Employer
upon termination of employment or upon Employer's request at any time.
E. Ownership of Confidential Information. Employee hereby grants to
Employer, and Employer hereby accepts, the entire right, title, and interest of
Employee in and to any of the Confidential Information created or developed by
Employee during the term of the employment under this Agreement and in the
course of Employee's employment with Employer hereunder, including, but not
limited to, all patents, copyrights, trade secrets, and other proprietary rights
in or based on the Confidential Information. If the Confidential Information or
any portion thereof is copyrightable, it shall be deemed to be a "work made for
hire," as such term is defined in the copyright laws of the United States.
Employee shall cooperate with Employer or its designees and execute assignments,
oaths, declarations, and other documents prepared by Employer, to effect the
foregoing or to perfect or enforce any proprietary rights resulting from or
related to this agreement. Such cooperation and execution shall be at no
additional compensation to Employee; provided, however, Employer shall reimburse
Employee for reasonable out-of-pocket expenses incurred at the specific request
of Employer.
6. Noncompetition Obligations. Employee will not, during the Term,
and for a period of eighteen (18) months immediately following termination of
employment hereunder
EXHIBIT 8.8
for Cause, engage in or conduct, as an owner, employee, consultant or otherwise,
any business which is competitive with a material portion of (i) Employer's
business as it is constituted on the date of this Agreement, or (ii) any new
line of business engaged in by Employer in which Employee participates, or
regarding which Employee has access to Confidential Information during the Term.
For purposes of this Section 6, Employer represents that its business currently
consists of the activities summarized in Schedule 3.7 of the Merger Agreement,
which Schedule 3.7 is incorporated herein by reference.
7. Customer Non-Solicitation. Employee will not, during the Term,
and for a period of eighteen (18) months following termination of employment
hereunder for any reason, solicit, divert, take away, or attempt to solicit,
divert or take away, any of Employer's customers or the business or patronage of
any such customers, either for himself or on behalf of any other person, firm,
partnership or corporation.
8. Co-Employee Non-Solicitation. Employee will not, during the
Term, and for a period of eighteen (18) months following termination of
employment hereunder for any reason, solicit, recruit or hire any other employee
of Employer, either for himself or on behalf of any other person, firm,
partnership or corporation; provided, however, that this provision shall not
apply to Xxxx Xxxxx in the event she is employed by Employer.
9. Enforcement.
A. Reasonableness of Restrictions. Employee acknowledges that
compliance with this Agreement is reasonable and necessary to protect Employer's
legitimate business interests, including but not limited to the Employer's
goodwill.
B. Irreparable Harm. Employee acknowledges that a breach of
Employee's obligations under this Agreement will result in great, irreparable
and continuing harm and damage to Employer for which there is no adequate remedy
at law.
C. Injunctive Relief. Employee agrees that in the event
Employee breaches this Agreement, Employer shall be entitled to seek, from any
court of competent jurisdiction, preliminary and permanent injunctive relief to
enforce the terms of this Agreement, in addition to any and all monetary damages
allowed by law, against Employee.
D. Extension of Covenants. In the event Employee violates any
one or more of the covenants contained in sections 6 through 8 of this
Agreement, Employee agrees that the running of the eighteen (18) month term of
each such covenant so violated shall be tolled during (a) the period(s) of any
such violation by Employee and (b) the pendency of any litigation (including
appeals) concerning any such violation by Employee.
E. Judicial Modification. The parties have attempted to limit
the Employee's right to compete only to the extent necessary to protect Employer
from unfair
EXHIBIT 8.8
business practices and/or unfair competition. The parties recognize, however,
that reasonable people may differ in making such a determination. Consequently,
the parties hereby agree that, if the scope or enforceability of the restrictive
covenant is in any way disputed at any time, a court or other trier of fact may
modify and enforce the covenant to the extent that it believes to be reasonable
under the circumstances existing at that time.
F. Attorney Fees. In the event it becomes necessary for either
party to institute a suit at law or in equity for the purposes of enforcing any
of the provisions of this Agreement, the prevailing party shall be entitled to
recover reasonable attorney fees, plus court costs and expenses, from the
nonprevailing party.
10. Indemnity. Employee warrants and represents that he has not
violated, is not violating, and will not violate any of the terms or conditions
of any prior employment agreement, restrictive covenant, or other agreement
entered into by him while in the employment of any other employer; that he has
not given and will not give to Employer at any time any customer list, trade
secret, or any other item of confidential information, obtained or received
while in the employment of such other employer; that his/her employment with
Employer is not restricted or limited in any way by any such employment
agreement or restrictive covenant or by operation of any state, federal or local
regulation, statute or other law of any kind, name or nature, including but not
limited to trade secret laws and immigration laws; and that Employee is in all
respects duly qualified and eligible to work for Employer. In the event any
legal or administrative action is commenced against the Employee, Employer or
both, arising out of Employee's former employment by another employer or
Employee's illegal action or violation of one or more of the warranties and
representations set forth in this section, Employee agrees to indemnify Employer
for all damages, costs and expenses, including reasonable attorney fees, which
Employer may have to pay in connection with such legal or administrative action.
11. Miscellaneous.
A. Survival. Employee understands that this Agreement shall be
effective when signed and that the terms of this Agreement shall remain in full
force and effect not only during the continuation of his/her employment, but
also after the termination of employment for any reason by Employer or Employee.
B. Waiver. Failure of the Employer to exercise or otherwise
act with respect to any of its rights under this Agreement shall not be
construed as a waiver of such breach, nor prevent the Employer from thereafter
enforcing strict compliance with any and all terms of this Agreement.
C. Severability. If any part of this Agreement shall be
adjudicated to be invalid or unenforceable, as to duration, territory or
otherwise, then such part shall be deemed deleted from the Agreement or amended,
as the case may be, in order to render the remainder of the Agreement valid and
enforceable.
EXHIBIT 8.8
D. Agreement Binding. This Agreement shall be binding upon and
inure to the benefit of Employer, Employer's successors and assigns, Employee
and Employee's heirs, executors, administrators and legal representatives.
E. Governing Law. This Agreement is made and entered into in
the State of Idaho and concerns employment situated in said state. This
Agreement shall be interpreted and construed in accordance with the laws of the
State of Idaho.
F. Titles and Captions. All section and paragraph titles and
captions contained in this Agreement are for convenience only and shall not be
deemed part of the context nor affect the construction or interpretation of this
Agreement.
G. Entire Agreement. This Agreement contains all the
understandings and agreements between the parties concerning matters set forth
in this Agreement. The terms of this Agreement supersede any and all prior
statements, representations and agreements by or between Employer and Employee,
or either of them, concerning the matters set forth in this Agreement. Employee
acknowledges that no person who is an agent or employee of Employer may orally
or by conduct modify, delete, vary, or contradict the terms or conditions of
this Agreement or this paragraph. This Agreement may be modified only by a
written agreement signed by both parties.
IN WITNESS WHEREOF, the parties have set their hands as of the date
first above written, and Employee acknowledges that he has read and understands
the entire contents of this Agreement and that he has received a copy of this
Agreement.
EMPLOYER:
XXXXXXXXXX.XXX, INC.
DATE:______________________ By______________________________________________
Xxxxxxx X. Xxxxxx
President and CEO
EMPLOYEE:
DATE:______________________ ________________________________________________
Xx. Xxxxxx X. Xxxxx, M.D.
EXHIBIT 8.8
STATE OF IDAHO )
) ss.
County of _________ )
On this _____ day of ________________, 1999, before me personally
appeared ______________________________, known or identified to me (or proved to
me on the oath of ______________________________) to be the president, or vice-
president, secretary or treasurer of XXXXXXXXXX.XXX, INC., the corporation that
executed the instrument or the person who executed the instrument on behalf of
said corporation, and acknowledged to me that such corporation executed the
same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
__________________________________________________
NOTARY PUBLIC FOR IDAHO
Residing at_______________________________________
My Commission Expires_____________________________
STATE OF ________ )
) ss.
County of _________ )
On this _______ day of _____________, 1999, before me personally
appeared XX. XXXXXX X. XXXXX, M.D., known or identified to me (or proved to me
on the oath of ____________________), to be the person whose name is subscribed
to the within instrument, and acknowledged to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
__________________________________________________
NOTARY PUBLIC FOR_________________________________
Residing at_______________________________________
My Commission Expires_____________________________
EXHIBIT 8.8
EXHIBIT A TO EMPLOYMENT, CONFIDENTIALITY
AND NONCOMPETITION AGREEMENT
DATED ________________, ____
Employee's Job Title: Chief Medical Technology Officer
Employee's Duties: To help oversee the development and expansion of The
Online Medical Bookstore, as an e-commerce site for the
Medinex community. Assist in web development and assist
in developing and monitoring the marketing strategies
for Medinex software and associated web sites. Assist
in evaluating the Medinex software for physicians and
patients as it evolves, and contribute toward and help
coordinate improvements to this software over time.
Such responsibilities would also included assisting in
the evaluation of competing technologies and software,
and assisting in the recommendation of the
implementation of novel technology and applications to
the Medinex software. The Chief Medical Technology
Officer shall report to the Chief Executive Officer.
Base Salary: $50,000 annually for the term of this Agreement,
payable at the same frequency as Employer's other
employees.
Stock Options: Upon signing this Agreement, Employer shall
grant to Employee the option to acquire 250,000
shares of Employer's common stock pursuant to
and subject to the terms of the Plan. The
options shall be qualified incentive stock
options (subject to section 10(d) of the Plan),
with an exercise price equal to the fair market
value of the common stock on the date of grant.
The options shall be subject to lock-ups and
restrictions required by the IPO underwriter.
Such lock-ups and restrictions shall be no more
restrictive than those placed upon stock options
issued to any of Employer's other officers and,
in any event, shall expire within one year of
the effectiveness of the IPO. The stock
underlying Employee's Options shall be
registered by Employer not later than the
registration of the stock underlying options
issued to any of Employer's other officers. The
options shall vest at the rate of 50,000 shares
EXHIBIT 8.8
as of December 31 of each of 1999, 2000, 2001, 2002 and
2003. After December 31, 2000, if Employee is employed
by Employer for less than a full calendar year, then,
unless Employee is terminated for Cause, a pro rata
share of the options that would have vested on December
31 of that year shall vest on the date of termination.
In addition, options that would otherwise vest in years
2003, 2002 and 2001 shall be subject to accelerated
vesting upon the Employer attaining certain sales goals
in 1999 and 2000. Specifically, if the audited gross
sales for Employer's Medinex division (including The
Online Medical Bookstore) for either of the calendar
years 1999 or 2000 equal or exceed any of the amounts
scheduled below, and so long as Employee remains
employed by Employer through the end of either such
applicable calendar year, then Employee shall have the
right, from and after February 15 following the year(s)
for which the sales goal was attained, to purchase the
number of shares of Employer's common stock scheduled
below which corresponds to the highest sales goal
attained.
Number
Sales Volume Goals of Cumulative Shares
------------------ --------------------
$1,000,000 15,000
$2,000,000 35,000
$3,000,000 60,000
$4,000,000 90,000
$5,000,000 125,000
Such accelerated options shall be in addition to the
scheduled 50,000 shares for 1999 and 2000. The vesting of
such accelerated options shall reduce the options otherwise
scheduled to vest, beginning with those scheduled to vest in
2003, and working forward. For example, assume qualifying
sales of $1,000,000 in 1999 and qualifying sales of
$3,000,000 in 2000. The options shall vest as follows:
December 31, 1999: 50,000 scheduled
15,000 accelerated
------
subtotal 65,000
------
December 31, 2000: 50,000 scheduled
60,000 accelerated
-------
subtotal 110,000
-------
EXHIBIT 8.8
December 31, 2001: 50,000 scheduled
December 31, 2002: 25,000 remainder of scheduled
December 31, 2003: -0-
-------
Grand Total 250,000
-------
By way of further example, if in the above example Employee
was terminated without Cause on June 30, 2002 (after the
expiration of the Term), then 12,500 shares would vest on
that date, and the remaining 12,500 shares of the total
grant would never vest. If Employee is terminated without
Cause during the Term, then pursuant to Section 4.C(ii), the
options shall continue to vest under the terms hereof as if
Employee had remained employed for the entire Term.
Vested options shall expire ten (10) years from the date of
grant (subject to termination provisions under the Plan).
EMPLOYER:
XXXXXXXXXX.XXX, INC.
DATE:_____________________ By______________________________________________
Xxxxxxx X. Xxxxxx
President and CEO
EMPLOYEE:
DATE:_____________________ ________________________________________________
Xx. Xxxxxx X. Xxxxx, M.D.
EXHIBIT 8.8
EXHIBIT 9.1
Form of Certificate of Netivation
CERTIFICATE OF REPRESENTATIONS AND WARRANTIES
I, XXXXXXX XXXXXX, certify that I am the duly elected President of
XXXXXXXXXX.XXX, INC., a Nevada corporation, and that the representations and
warranties of Xxxxxxxxxx.xxx, Inc. contained in the Agreement and Plan of Merger
dated as of March ___, 1999, among The Online Medical Bookstore, LLC, Xx. Xxxxxx
X. Xxxxx, M.D., Xxxxxxxxxx.xxx, Inc., and The Online Medical Bookstore, Inc.
(the "Merger Agreement") are true and correct in all material respects as of the
date of this Certificate. I also certify that Xxxxxxxxxx.xxx, Inc. has
performed and complied with all agreements, covenants, and conditions required
by the Merger Agreement to be performed and complied with by it prior to the
date of this Certificate.
DATED this ___ day of _________, 1999.
XXXXXXXXXX.XXX, INC.
By________________________________________________
Xxxxxxx X. Xxxxxx, President
EXHIBIT 9.1
EXHIBIT 9.3
Form of Employment Agreement with Xxxx Xxxxx
EMPLOYMENT, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT
This Employment, Confidentiality and Noncompetition Agreement
("Agreement") is made and entered into effective the _____ day of
_______________, 1999, by and between XXXXXXXXXX.XXX, INC., a Nevada
corporation ("Employer"), and XXXX XXXXX ("Employee").
In consideration of their mutual promises and covenants contained
herein, the receipt and legal sufficiency of which consideration is hereby
acknowledged, the parties hereby agree as follows:
1. Employment. Employer shall employ Employee and Employee shall
work for Employer in the employment position described in Exhibit A hereto,
which is hereby incorporated herein and made a part of this Agreement. In this
position, Employee shall perform all reasonably assigned duties, comply with all
employment policies, and obey all rules, regulations and special instructions
that now exist or that may hereafter be reasonably established by Employer from
time to time consistent with Exhibit A. Employee shall render such services and
perform such duties as Employer shall reasonably direct. Employee may render
such services and perform such duties from any location in the continental
United States. Employee warrants that all information provided by Employee in
applying for employment is true and correct.
2. Standard of Performance. Employee accepts employment with
Employer on the terms and conditions herein set forth. Employee recognizes that
Employee owes to Employer duties of loyalty, fidelity and obedience in all
matters pertaining to such employment. Employee agrees to serve Employer
diligently and faithfully, to perform all duties hereunder to the best of
Employee's ability on a part-time basis not to exceed seventy-five (75) hours
per month, at such times as Employer shall reasonably request.
3. Compensation. In consideration for the services of Employee
rendered to Employer pursuant to the terms of this Agreement, and subject to the
full performance of Employee's obligations hereunder, Employer shall pay
Employee according to the provisions of the Employer's compensation plan
described in Exhibit A hereto. Employee shall receive no compensation or
benefits, including but not limited to paid holidays, paid vacation and paid
health insurance, that is not set forth in Exhibit A hereto. Employee
understands that the compensation plan is subject to modification by the
Employer at any time.
4. Term of Employment. Employee's term of employment under this
Agreement shall commence on the ____ day of ________, 1999, and shall continue
thereafter
EXHIBIT 9.3
until the ____ day of_______, 2001 (the "Term"), unless otherwise terminated in
accordance with this Agreement.
A. Termination for Cause. During the Term, the Employer may
---------------------
terminate the employment of the Employee for "Cause" by giving the Employee
prior written notice of such termination, with reasonable specificity of the
details thereof. For the purposes of this Agreement, "Cause" shall include but
not be limited to (i) the Employee's willful disregard of lawful instructions of
the Employer's Board of Directors or Chief Executive Officer which are
consistent with the Employee's position and duties set forth herein; (ii) the
Employee's willful neglect of duties; (iii) the Employee's willful actions which
may reasonably be expected to result in material damage to the Employer; (iv)
the Employee's abuse of alcohol or other drugs or controlled substances; (v) the
Employee's material breach of any of the terms or conditions contained herein;
(vi) the conviction of the Employee of a felony; or (vii) the Employee's theft,
embezzlement or misappropriation of funds from the Employer. In addition,
except as specified in Section 4.B, Employee's resignation hereunder shall be
deemed a termination for Cause. A termination pursuant to Section 4.A(i), (ii),
(iii), (iv), or (v) shall take effect thirty (30) days after the giving of the
notice contemplated hereby unless the Employee shall during such thirty (30) day
period remedy to the reasonable satisfaction of the Board of Directors or Chief
Executive Officer the misconduct, disregard, abuse, or breach specified in such
notice. A termination pursuant to Section 4.A(vi) or (vii) shall take effect
immediately upon the giving of the notice contemplated hereby.
or
B. Termination Without Cause. A termination of the Employee's
-------------------------
employment shall be deemed to be "without Cause" as follows: (i) if the Employer
terminates the Employee's employment for any reason other than for Cause; (ii)
if the Employee resigns as a result of Employer's requesting the Employee to
perform duties inconsistent with the duties set forth herein, or impeding the
Employee's performance of duties consistent with the duties set forth herein,
and the Employer fails, within thirty (30) days after its receipt of written
notice thereof from the Employee, to modify to the reasonable satisfaction of
the Employee his duties in accordance with this Agreement.
C. Effect of Termination of Employment
-----------------------------------
(i) Any Termination. Upon any termination of the Employee's
employment, the Employer shall pay the Employee:
(a) the unpaid portion of any accrued Base Salary described
in Exhibit A, computed on a pro rata basis to the date of termination; and
(b) reimbursement for any expenses payable pursuant to
Exhibit A for which the Employee shall not have theretofore been reimbursed.
EXHIBIT 9.3
(ii) Termination Without Cause: Severance. In addition to the
Employee's right to receive amounts described in Section 4.C(i), upon any
termination of the Employee's employment pursuant to Section 4.B and subject to
the Employee's continuing performance of any obligations which the Employee may
have under this Agreement or any other agreement with the Employer, which by
their terms survive any termination of employment (including without limitation
any nondisclosure, non-competition, or non-solicitation obligations), (A) the
Employee shall receive her Base Salary provided for in Exhibit A through the
later of (I) the end of the Term or (II) six (6) months following termination,
payable on the same dates as provided for in Exhibit A; and (B) the stock
options described in Exhibit A shall continue to vest under the terms thereof as
if Employee remained employed for the entire Term.
5. Confidential Information.
A. Definition of Confidential Information. Employer is in the
business of designing, creating, perfecting, marketing, distributing, selling
and servicing computer software, and has built up an established and extensive
trade and reputation in the industry. Employer has developed and continues to
develop commercially valuable technical and non-technical information
("Confidential Information") that is proprietary and confidential and/or
constitutes Employer's "trade secrets" within the meaning of the Idaho Trade
Secrets Act, Idaho Code sections 48-801 through 48-807. Such Confidential
Information, which is vital to the success of Employer's business, includes, but
is not necessarily limited to: programs, computer programs, system
documentation, data compilations, manuals, methods, techniques, processes,
patented and/or unpatented technology, research, know-how, development, designs,
devices, inventions, the identities of customers, prospective customers,
suppliers and prospective suppliers, contracts with suppliers and customers,
sales proposals, methods of sales, marketing research and data, pricing
policies, cost information, financial information, business plans, specialized
requests of Employer's customers, and other materials and documents developed by
Employer. Confidential Information also includes special hardware, product
hardware, related software and related documentation, either owned by Employer
or in Employer's possession under an agreement of nondisclosure. Through
Employee's employment, Employee may become acquainted with or contribute to the
Employer's Confidential Information through inventions, discoveries,
improvements, software development, and/or in other ways.
B. Employee Access to Confidential Information. Employee
agrees: (a) to access only such Confidential Information as is necessary to
perform Employee's job function; (b) to allow access to Confidential Information
under Employee's control to only those of Employee's co-employees whose job
functions for Employer necessitate access to such Confidential Information; and
(c) to allow such co-employees to access only such Confidential Information
under Employee's control as is necessary to the co-employee's performance of
his/her job functions for Employer.
C. Nondisclosure of Confidential Information. Employee shall
not, at any time, either during or subsequent to employment, directly or
indirectly, appropriate,
EXHIBIT 9.3
disclose or divulge any Confidential Information to any person not then employed
by Employer, unless authorized or directed by Employer. If Employer authorizes
or directs Employee to disclose Confidential Information to any such third
party, Employee must ensure that a signed confidentiality agreement is or has
been obtained from the third party to whom Confidential Information is being
disclosed and that all Confidential Information so disclosed is clearly marked
"Confidential."
D. Return of Confidential and Other Information. All Confidential
Information provided to Employee, and all documents and things prepared by
Employee in the course of Employee's employment, including but not necessarily
limited to correspondence, drawings, blueprints, manuals, letters, notes, lists,
notebooks, reports, flow-charts, computer programs, proposals, DayTimers,
planners, calendars, schedules, discs, data tapes, financial plans and
information, business plans, and other documents and records, whether in hard
copy, magnetic media or otherwise, and any and all copies thereof, are the
exclusive property of Employer and shall be returned immediately to Employer
upon termination of employment or upon Employer's request at any time.
E. Ownership of Confidential Information. Employee hereby grants to
Employer, and Employer hereby accepts, the entire right, title, and interest of
Employee in and to any of the Confidential Information created or developed by
Employee during the term of the employment under this Agreement and in the
course of Employee's employment with Employer hereunder, including, but not
limited to, all patents, copyrights, trade secrets, and other proprietary rights
in or based on the Confidential Information. If the Confidential Information or
any portion thereof is copyrightable, it shall be deemed to be a "work made for
hire," as such term is defined in the copyright laws of the United States.
Employee shall cooperate with Employer or its designees and execute assignments,
oaths, declarations, and other documents prepared by Employer, to effect the
foregoing or to perfect or enforce any proprietary rights resulting from or
related to this agreement. Such cooperation and execution shall be at no
additional compensation to Employee; provided, however, Employer shall reimburse
Employee for reasonable out-of-pocket expenses incurred at the specific request
of Employer.
6. Noncompetition Obligations. Employee will not, during the Term,
and for a period of eighteen (18) months immediately following termination of
employment hereunder for Cause, engage in or conduct, as an owner, employee,
consultant or otherwise, any business which is competitive with a material
portion of (i) Employer's business as it is constituted on the date of this
Agreement, or (ii) any new line of business engaged in by Employer in which
Employee participates, or regarding which Employee has access to Confidential
Information during the Term. For purposes of this Section 6, Employer
represents that its business currently consists of the activities summarized in
Schedule 3.7 of that certain Agreement and Plan of Merger dated _____________,
1999, among Employer, Xx. Xxxxxx X. Xxxxx, M.D., The Online Medical Bookstore,
LLC, and The Online Medical Bookstore, Inc., which Schedule 3.7 is incorporated
herein by reference.
EXHIBIT 9.3
7. Customer Non-Solicitation. Employee will not, during the Term,
and for a period of eighteen (18) months following termination of employment
hereunder for any reason, solicit, divert, take away, or attempt to solicit,
divert or take away, any of Employer's customers or the business or patronage of
any such customers, either for himself or on behalf of any other person, firm,
partnership or corporation.
8. Co-Employee Non-Solicitation. Employee will not, during the
Term, and for a period of eighteen (18) months following termination of
employment hereunder for any reason, solicit, recruit or hire any other employee
of Employer, either for himself or on behalf of any other person, firm,
partnership or corporation.
9. Enforcement.
A. Reasonableness of Restrictions. Employee acknowledges that
compliance with this Agreement is reasonable and necessary to protect Employer's
legitimate business interests, including but not limited to the Employer's
goodwill.
B. Irreparable Harm. Employee acknowledges that a breach of
Employee's obligations under this Agreement will result in great, irreparable
and continuing harm and damage to Employer for which there is no adequate remedy
at law.
C. Injunctive Relief. Employee agrees that in the event
Employee breaches this Agreement, Employer shall be entitled to seek, from any
court of competent jurisdiction, preliminary and permanent injunctive relief to
enforce the terms of this Agreement, in addition to any and all monetary damages
allowed by law, against Employee.
D. Extension of Covenants. In the event Employee violates any
one or more of the covenants contained in sections 6 through 8 of this
Agreement, Employee agrees that the running of the eighteen (18) month term of
each such covenant so violated shall be tolled during (a) the period(s) of any
such violation by Employee and (b) the pendency of any litigation (including
appeals) concerning any such violation by Employee.
E. Judicial Modification. The parties have attempted to limit
the Employee's right to compete only to the extent necessary to protect Employer
from unfair business practices and/or unfair competition. The parties
recognize, however, that reasonable people may differ in making such a
determination. Consequently, the parties hereby agree that, if the scope or
enforceability of the restrictive covenant is in any way disputed at any time, a
court or other trier of fact may modify and enforce the covenant to the extent
that it believes to be reasonable under the circumstances existing at that time.
F. Attorney Fees. In the event it becomes necessary for either
party to institute a suit at law or in equity for the purposes of enforcing any
of the provisions of this
EXHIBIT 9.3
Agreement, the prevailing party shall be entitled to recover reasonable attorney
fees, plus court costs and expenses, from the nonprevailing party.
10. Indemnity. Employee warrants and represents that he has not
violated, is not violating, and will not violate any of the terms or conditions
of any prior employment agreement, restrictive covenant, or other agreement
entered into by him while in the employment of any other employer; that he has
not given and will not give to Employer at any time any customer list, trade
secret, or any other item of confidential information, obtained or received
while in the employment of such other employer; that his/her employment with
Employer is not restricted or limited in any way by any such employment
agreement or restrictive covenant or by operation of any state, federal or local
regulation, statute or other law of any kind, name or nature, including but not
limited to trade secret laws and immigration laws; and that Employee is in all
respects duly qualified and eligible to work for Employer. In the event any
legal or administrative action is commenced against the Employee, Employer or
both, arising out of Employee's former employment by another employer or
Employee's illegal action or violation of one or more of the warranties and
representations set forth in this section, Employee agrees to indemnify Employer
for all damages, costs and expenses, including reasonable attorney fees, which
Employer may have to pay in connection with such legal or administrative action.
11. Miscellaneous.
A. Survival. Employee understands that this Agreement shall be
effective when signed and that the terms of this Agreement shall remain in full
force and effect not only during the continuation of his/her employment, but
also after the termination of employment for any reason by Employer or Employee.
B. Waiver. Failure of the Employer to exercise or otherwise
act with respect to any of its rights under this Agreement shall not be
construed as a waiver of such breach, nor prevent the Employer from thereafter
enforcing strict compliance with any and all terms of this Agreement.
C. Severability. If any part of this Agreement shall be
adjudicated to be invalid or unenforceable, as to duration, territory or
otherwise, then such part shall be deemed deleted from the Agreement or amended,
as the case may be, in order to render the remainder of the Agreement valid and
enforceable.
D. Agreement Binding. This Agreement shall be binding upon and
inure to the benefit of Employer, Employer's successors and assigns, Employee
and Employee's heirs, executors, administrators and legal representatives.
E. Governing Law. This Agreement is made and entered into in
the State of Idaho and concerns employment situated in said state. This
Agreement shall be interpreted and construed in accordance with the laws of the
State of Idaho.
EXHIBIT 9.3
F. Titles and Captions. All section and paragraph titles and
captions contained in this Agreement are for convenience only and shall not be
deemed part of the context nor affect the construction or interpretation of this
Agreement.
G. Entire Agreement. This Agreement contains all the understandings
and agreements between the parties concerning matters set forth in this
Agreement. The terms of this Agreement supersede any and all prior statements,
representations and agreements by or between Employer and Employee, or either of
them, concerning the matters set forth in this Agreement. Employee acknowledges
that no person who is an agent or employee of Employer may orally or by conduct
modify, delete, vary, or contradict the terms or conditions of this Agreement or
this paragraph. This Agreement may be modified only by a written agreement
signed by both parties.
IN WITNESS WHEREOF, the parties have set their hands as of the date first
above written, and Employee acknowledges that he has read and understands the
entire contents of this Agreement and that he has received a copy of this
Agreement.
EMPLOYER:
XXXXXXXXXX.XXX, INC.
DATE:____________________ By______________________________________________
Xxxxxxx X. Xxxxxx
President and CEO
EMPLOYEE:
DATE:____________________ ________________________________________________
Xxxx Xxxxx
EXHIBIT 9.3
STATE OF IDAHO )
) ss.
County of _______ )
On this _____ day of ________________, 1999, before me personally
appeared ______________________________, known or identified to me (or proved to
me on the oath of ______________________________) to be the president, or vice-
president, secretary or treasurer of XXXXXXXXXX.XXX, INC., the corporation that
executed the instrument or the person who executed the instrument on behalf of
said corporation, and acknowledged to me that such corporation executed the
same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
__________________________________________________
NOTARY PUBLIC FOR IDAHO
Residing at_______________________________________
My Commission Expires_____________________________
STATE OF ______ )
) ss.
County of _______ )
On this _______ day of _____________, 1999, before me personally
appeared XXXX XXXXX, known or identified to me (or proved to me on the oath of
____________________), to be the person whose name is subscribed to the within
instrument, and acknowledged to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
__________________________________________________
NOTARY PUBLIC FOR_________________________________
Residing at_______________________________________
My Commission Expires_____________________________
EXHIBIT 9.3
EXHIBIT A TO EMPLOYMENT, CONFIDENTIALITY
AND NONCOMPETITION AGREEMENT
DATED ________________, ____
Employee's Job Title: Customer Support Supervisor
Employee's Duties: To supervise customer relations for The Online Medical
Bookstore Employee shall report to the Chief Executive
Officer.
Base Salary: $30,000 annually for the term of this Agreement,
payable at the same frequency as Employer's other
employees.
Stock Options: Employer shall grant to Employee an option to acquire
ten thousand (10,000) shares of Employer's common stock
pursuant to and subject to the terms of the
Xxxxxxxxxx.xxx, Inc. 1999 Equity Incentive Plan (the
"Plan") (the "Plan"). The options shall be qualified
incentive stock options (subject to section 10(d) of
the Plan), with an exercise price equal to the fair
market value of the common stock on the date of grant.
The options shall be subject to lock-ups and
restrictions required by the IPO underwriter. Such
lock-ups and restrictions shall be no more restrictive
than those placed upon stock options issued to any of
Employer's officers and, in any event, shall expire
within one year of the effectiveness of the IPO. The
stock underlying Employee's Options shall be registered
by Employer not later than the registration of the
stock underlying options issued to any of Employer's
officers. The options shall vest as follows: five
thousand (5,000) shares vesting on December 31, 1999,
and five thousand (5,000) shares vesting on December
31, 2000, so long as Employee remains employed by
Employer through the end of either such applicable
calendar year.
EMPLOYER:
XXXXXXXXXX.XXX, INC.
DATE:_________________ By______________________________________________
Xxxxxxx X. Xxxxxx
EXHIBIT 9.3
President and CEO
EMPLOYEE:
DATE:______________________ __________________________________________________
Xxxx Xxxxx
EXHIBIT 9.3
EXHIBIT 10.3B
Form of Pre-closing Certificate
The Online Medical Bookstore, LLC
OFFICERS' CERTIFICATE
_____________________________
Pursuant to the provisions of the Agreement and Plan of Merger, dated
______, 1999 (the "Merger Agreement"; certain terms used herein and not
otherwise defined herein but which are defined in the Merger Agreement are used
herein as therein defined), by and among The Online Medical Bookstore, LLC, a
limited liability company organized and existing under the laws of the State of
Delaware (the "Seller"), the undersigned, Xxxxxxxxxx.xxx, Inc., a corporation
organized and existing under the laws of the State of Nevada (the "Purchaser"),
and The Online Medical Bookstore, Inc., a corporation organized and existing
under the laws of the State of Idaho, I, Xx. Xxxxxx X. Xxxxx, M.D., the duly-
elected President of the Seller, do hereby certify as follows:
(1) The representations and warranties of the Seller and Shareholder
in the Merger Agreement are true and correct, as if made on and as of the date
hereof;
(2) With regard to the Merger Agreement, each of the Seller and
Shareholder have complied, or prior to closing will be able to comply, in all
material aspects, with all the agreements and have satisfied, or prior to
closing will be able to satisfy, all the conditions on their part to be
performed or satisfied, in all material respects at or prior to closing;
(3) Nothing has come to my attention that would indicate that the
representations and warranties of the Purchaser in the Merger Agreement are
other than true and correct;
(4) With regard to the Merger Agreement, nothing has come to my
attention that would indicate that the Purchaser has not complied, or will not
be able to comply, in all material aspects, with all the agreements or has not
satisfied, or will not be able to satisfy, all the conditions on its part to be
performed or satisfied, in all material respects at or prior to closing;
(5) Nothing has come to my attention that would indicate that the
closing anticipated in the Merger Agreement will not occur simultaneously with
the closing of the Purchaser's initial public securities offering;
EXHIBIT 10.3B
(6) Since the date of the Merger Agreement, there have not been (i)
any material adverse change in the condition (financial or otherwise), earnings,
operations or business of the Seller, (ii) any transaction that is material to
the Seller, except transactions entered into in the ordinary course of business,
(iii) any obligation, direct or contingent, that is material to the Seller,
incurred by the Seller, except obligations incurred in the ordinary course of
business or (iv) any loss or damage (whether or not insured) to the property of
the Seller which has a material adverse effect on the condition (financial or
otherwise), earnings, operations or business of the Seller.
(7) I will inform the Purchaser immediately in writing if any of
the representations contained in this certificate shall change or shall no
longer be complete and accurate.
(8) The underwriters of the Purchaser's initial public securities
offering shall be entitled to rely upon this Certificate.
IN WITNESS WHEREOF, I have set my hand and the seal of the Seller this
___ day of _________, 1999.
________________________________________
[CORPORATE SEAL] Xxxxxx X. Xxxxx, M.D., President
________________________________________
Xx. Xxxxxx X. Xxxxx, Individually
EXHIBIT 10.3B
EXHIBIT 10.3A
Form of Pre-closing Certificate
Xxxxxxxxxx.xxx, Inc.
OFFICERS' CERTIFICATE
_____________________________
Pursuant to the provisions of the Agreement and Plan of Merger, dated
______, 1999 (the "Merger Agreement"; certain terms used herein and not
otherwise defined herein but which are defined in the Merger Agreement are used
herein as therein defined), by and among The Online Medical Bookstore, LLC, a
limited liability company organized and existing under the laws of the State of
Delaware (the "Seller"), the undersigned, Xxxxxxxxxx.xxx, Inc., a corporation
organized and existing under the laws of the State of Nevada (the "Purchaser"),
and The Online Medical Bookstore, Inc., a corporation organized and existing
under the laws of the State of Idaho, I, Xxxxxxx X. Xxxxxx, the duly-elected
President of the Purchaser, do hereby certify as follows:
(1) The representations and warranties of the Purchaser in the Merger
Agreement are true and correct, as if made on and as of the date hereof;
(2) With regard to the Merger Agreement, the Purchaser has complied,
or prior to closing will be able to comply, in all material aspects, with all
the agreements and has satisfied, or prior to closing will be able to satisfy,
all the conditions on its part to be performed or satisfied, in all material
respects at or prior to closing;
(3) Nothing has come to my attention that would indicate that the
representations and warranties of the Seller or Shareholder in the Merger
Agreement are other than true and correct;
(4) With regard to the Merger Agreement, nothing has come to my
attention that would indicate that the Seller and Shareholder have not complied,
or will not be able to comply, in all material aspects, with all the agreements
or have not satisfied, or will not be able to satisfy, all the conditions on
their part to be performed or satisfied, in all material respects at or prior to
closing;
(5) Nothing has come to my attention that would indicate that the
closing anticipated in the Merger Agreement will not occur simultaneously with
the closing of the Purchaser's initial public securities offering;
EXHIBIT 10.3A
(6) Since the date of the Merger Agreement, there have not been (i)
any material adverse change in the condition (financial or otherwise), earnings,
operations or business of the Purchaser, (ii) any transaction that is material
to the Purchaser, except transactions entered into in the ordinary course of
business, (iii) any obligation, direct or contingent, that is material to the
Purchaser, incurred by the Purchaser, except obligations incurred in the
ordinary course of business or (iv) any loss or damage (whether or not insured)
to the property of the Purchaser which has a material adverse effect on the
condition (financial or otherwise), earnings, operations or business of the
Purchaser.
(7) I will inform the Shareholder immediately in writing if any of
the representations contained in this certificate shall change or shall no
longer be complete and accurate.
(8) The underwriters of the Purchaser's initial public securities
offering shall be entitled to rely upon this Certificate.
IN WITNESS WHEREOF, I have set my hand and the seal of the Purchaser
this ___ day of _________, 1999.
________________________________________
[CORPORATE SEAL] Xxxxxxx X. Xxxxxx, President
EXHIBIT 10.3A
SCHEDULE 2.6
Exceptions to Events in the Financial Statements
None.
SCHEDULE 2.6
SCHEDULE 2.8
"Employee Welfare Benefit Plans"
and
"Employee Pension Benefit Plans"
None.
SCHEDULE 2.8
SCHEDULE 2.13
Insurance Policies
None.
SCHEDULE 2.13
SCHEDULE 2.18
Company's Contracts
The Company has arrangements (which consist of credit applications) with each of
the following vendors:
1. Xxxxxxxx Medical Books: distributor of medical textbooks and software
2. XxXxx Health Sciences: distributor of medical equipment (stethoscopes
and diagnostic kits)
3. Majors Medical Books: distributor of medical textbooks and software
4. Xxxxxxxxxxx Book Distributors Inc.: distributor of medical textbooks
and software
5. Xxxxx Yearbook: distributor of Xxxxx medical textbooks and software
6. Brenta LLC: distributor of medical clogs (Calzuro) and equipment
(stethoscopes)
7. Xxxxxx Medical: distributor of medical clogs (MediPlogs and Plogs)
8. Dansko Inc.: distributor of Dansko clogs
9. Pygmy Computer Systems: personal electronics
The Company has oral arrangements (no formal written agreements) with the
following vendors:
1. Scrubheads: distributor of medical scrub hats
2. Stethescope Clip: small account for sale of stethoscope clips via Dr.
Xxxxx Xxx.
SCHEDULE 2.18
SCHEDULE 2.19
Personal Property
1. Dell Computer
2. Laptop Computer
3. Hewlett Packard Office Jet Printer
SCHEDULE 2.19
SCHEDULE 2.20
Real Property
The Company uses the residential home of the Shareholder at 00 Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, in the conduct of its business.
SCHEDULE 2.20
SCHEDULE 2.21
Employee Information
2.21.1 Xxxxxx Xxxxx, M.D., President of the Company. No salary has been paid
as of yet.
2.21.3. Xxxx Xxxxx, Primary Customer Service Agent for the Company as of April
1998. Annual salary of $50,000. No salary has been paid as of yet.
2.21.4 No scheduled or contemplated increases in compensation or bonuses.
2.21.5 No scheduled or contemplated employee promotions.
SCHEDULE 2.21
SCHEDULE 2.22
Intellectual Property
1. No registered patents, trademarks, tradenames, service marks and
copyrights, nor any applications therefor.
2. The Company owns the following URLs which will be assigned to
Xxxxxxxxxx.xxx, Inc. effective as of the Closing:
a. XxxxxxxXxxxx.xxx (active site)
b. XxxXxxxxxx.xxx (active site)
c. XXXxxxx.xxx (points to XxxxxxxxXxxXxxxx.xxx)
d. XxxxxxxxXxxXxxxx.xxx (active site)
Although the Company owns the registered domain names listed above, the Company
does not hold a registered trademark or service xxxx for such names.
3. Ownership of the following URLs shall remain with the Shareholder, as
applicable:
a. XxxXxxxx.xxx
b. XxxXxxxxxxxx.xxx
c. XxxxxxxXxxxxxxxx.xxx (Shareholder)
d. XxxxxxxXxxxxxxxx.xxx (Shareholder)
e. XxxxxxxXxxxxxxxx.xxx (Shareholder)
f. XxxxxxxXxxxx.xxx (Shareholder)
g. XxxxxxXxxx.xxx (Company)
Although the Shareholder or Company owns the registered domain names listed
above, neither the Shareholder nor the Company holds a registered trademark or
service xxxx for such names. Items 3c through 3g shall be subject to the terms
of the Shareholder's Employment and Noncompetition Agreement which shall be
entered into with Netivation in connection with the Closing as set forth in the
Agreement and Plan of Merger.
SCHEDULE 2.22
SCHEDULE 3.7
Scope of Current Business Operations
Currently, Xxxxxxxxxx.xxx, Inc. conducts the following activities:
. produces and maintains Votenet (xxx.xxxxxxx.xxx), a political community
designed for voters, politicians, advocacy and special interest
organizations, lobbyists, students, members of the media and others
interested in public policy and the political process;
. produces and maintains Medinex (xxx.xxxxxxx.xxx), a healthcare community
designed for physicians, patients, hospitals, insurance companies,
pharmaceutical and medical supply companies and others interested in
healthcare issues;
. develops a complementary suite of Internet based tools and services
specifically for members of each community, including targeted search engine
technology, e-commerce technologies, e-mail, e-mail delivery services, Web
design and hosting services, chat rooms and discussion forums;
. provides campaign management software for the Votenet community that can be
used to manage voter data and interaction, fund-raising and reporting;
. provides an online fund-raising service that allows political campaigns to
use Xxxxxxxxxx.xxx to facilitate their online fund-raising activities;
. provides a Web-based physicians' office management application for the
Medinex community that provides physicians with solutions to basic and
multiple medical office application needs, such as: patient account ledgers;
medical records management; accounts receivable; scheduling; insurance
billing; and other services and applications designed to increase office
efficiency and productivity.
. maintains a health site certification process;
. provides advertising opportunities in the form of traditional banner
advertisements, e-mail based advertisements and product sponsorships;
. pursues cross-linking arrangements with Internet content providers; and
. partners with merchants and service providers to integrate their products and
services into the Votenet and Medinex communities, making them available for
sale to the community member.
SCHEDULE 3.7
