ASSET PURCHASE AGREEMENT
BY AND BETWEEN
XXXXXXX X. SINGLE,
INNOVATIVE SOFTWARE TECHNOLOGIES, INC.,
AND
GET IN THE GAME, INC.
DATED AS OF NOVEMBER 18, 2004
TABLE OF CONTENTS
PAGE NO.
Article I SALE OF ASSETS; ASSUMPTION OF LIABILITIES; CLOSING................. 1
Section 1.1 Sale of Assets.................................... 1
Section 1.2 Excluded Assets................................... 2
Section 1.3 Assumption of Liabilities......................... 2
Section 1.4 Purchase Price.................................... 3
Section 1.5 Performance Consideration......................... 4
Section 1.6 Closing........................................... 4
Section 1.7 Deliveries at Closing............................. 4
Section 1.8 Nonassignability of Assets........................ 4
Article II REPRESENTATIONS AND WARRANTIES OF SELLER.......................... 5
Section 2.1 Representations and Warranties of Seller.......... 5
Section 2.2 No Conflict; Approvals............................ 5
Section 2.3 Books and Records................................. 5
Section 2.4 Title to the Assets............................... 5
Section 2.5 Contracts......................................... 5
Section 2.6 Litigation........................................ 6
Section 2.7 Taxes............................................. 6
Section 2.8 Inventory......................................... 7
Section 2.9 Broker's or Finder's Fees......................... 7
Section 2.10 Compliance with Laws.............................. 7
Section 2.11 Disclosure........................................ 7
Section 2.12 Intellectual Property............................. 7
Section 2.13 Investment........................................ 8
Article III REPRESENTATIONS AND WARRANTIES OF PURCHASER...................... 8
Section 3.1 Representations and Warranties of Purchaser....... 8
Section 3.2 Organization and Good Standing.................... 8
Section 3.3 Corporate Authority............................... 8
Section 3.4 No Conflict; Authorization........................ 8
Section 3.5 Litigation........................................ 9
Section 3.6 Broker's or Finder's Fees......................... 9
Article IV CONDITIONS TO PURCHASER'S OBLIGATIONS............................. 9
Section 4.1 Conditions to Purchaser's Obligations............. 9
Section 4.2 Transfer Documents................................ 9
Section 4.3 No Litigation Threatened.......................... 9
Section 4.4 Approvals and Consents............................ 9
Section 4.5 Absence of Liens.................................. 9
Section 4.6 Material Adverse Changes.......................... 10
Section 4.7 Due Diligence; Schedules.......................... 10
Section 4.8 Employment Agreement.............................. 10
Section 4.9 Independent Contractor
Agreements............. ERROR! BOOKMARK NOT DEFINED.
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Section 4.10 Non-Foreign Affidavit............................. 10
Section 4.11 Bank Accounts..................................... 10
Section 4.12 Xxxx of Sale...................................... 10
Section 4.13 Other Documents................................... 10
Article V CONDITIONS TO SELLER'S and Stockholder's OBLIGATIONS............... 10
Section 5.1 Conditions to Seller's Obligations................ 10
Section 5.2 No Litigation Threatened.......................... 11
Article VI COVENANTS......................................................... 11
Section 6.1 Further Assurances................................ 11
Section 6.2 Disclosure........................................ 11
Section 6.3 Tax Matters....................................... 11
Section 6.4 Non-competition; Non-Solicitation................. 12
Section 6.5 Confidentiality................................... 12
Section 6.6 Sales and Use Taxes............................... 13
Section 6.7 Consent of Seller................................. 13
Section 6.8 IST Common Stock.................................. 13
Article VII Intentionally Omitted............................................ 14
Article VIII SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION..... 14
Section 8.1 Survival of Representations and Warranties........ 14
Section 8.2 Seller's Obligation to Indemnify.................. 14
Section 8.3 Limitations on Seller's Indemnification........... 15
Section 8.4 Survival of Purchaser Obligations................. 15
Section 8.5 Purchaser Obligation to Indemnify................. 15
Section 8.6 Limitations on Purchaser Indemnification.......... 16
Section 8.7 Procedures Relating to Indemnification............ 16
Section 8.8 Characterization of Indemnification Payments...... 17
Article IX MISCELLANEOUS..................................................... 17
Section 9.1 Certain Definitions............................... 17
Section 9.2 Professional Expenses............................. 18
Section 9.3 Governing Law..................................... 18
Section 9.4 Jurisdiction...................................... 18
Section 9.5 Captions.......................................... 18
Section 9.6 Notices........................................... 18
Section 9.7 Parties in Interest............................... 19
Section 9.8 Counterparts...................................... 19
Section 9.9 Entire Agreement.................................. 19
Section 9.10 Amendments; Waivers............................... 19
Section 9.11 Severability...................................... 20
Section 9.12 Rules of Construction............................. 20
Section 9.13 Risk of Loss...................................... 20
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SCHEDULES
Schedule 1.1(a) Inventory
Schedule 1.1(b) Contracts
Schedule 2.12 Intellectual Property
EXHIBITS
Exhibit A Assumed Liabilities
Exhibit B Employment Agreement between
Xxxx Xxxxxx and Purchaser
Exhibit C Xxxx of Sale
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") dated this ___ day of
November, 2004 by and between Xxxxxxx X. Single d/b/a Get in the Game (the
"SELLER"), Innovative Software Technologies, Inc., a California Corporation
("PURCHASER"), and Get in the Game, Inc., a Delaware corporation and a wholly
owned subsidiary of Purchaser (the "NEW SUB").
BACKGROUND
Seller desires to sell, transfer and assign to Purchaser, and Purchaser
desires to purchase and assume from Seller, pursuant to and in accordance with
the terms and conditions of this Agreement, substantially all of the assets and
certain of the liabilities of Seller, which is engaged in the business of
conducting seminars and workshops and distributing literature relating to
college preparation for prospective student athletes and their parents (the
"BUSINESS").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE I
SALE OF ASSETS; ASSUMPTION OF LIABILITIES; CLOSING
SECTION 1.1 SALE OF ASSETS. Subject to the terms and conditions of this
Agreement, at the Closing (as defined herein), Seller shall sell, assign,
transfer and deliver to New Sub, and Purchaser shall purchase from Seller, all
of Seller's right, title and interest in and to all Seller's assets other than
the Excluded Assets (as defined below), including the following assets
(collectively, the "PURCHASED ASSETS"). The Purchased Assets shall include, but
not be limited to, the following:
(a) all inventory of Seller located at 0 Xxx Xxxx Xxxxx Xxxx, Xxxxx
Xx, Xxx Xxxxxx, (the "PREMISES") on hand as of the Closing Date, all inventory
of Seller in the possession of a contractor or subcontractor of Seller as of the
Closing Date, all inventory of Seller consigned to customers of Seller as of the
Closing Date and all inventory of Seller in transit as of the Closing Date
pursuant to purchase orders issued by Seller in the ordinary course of business,
including but not limited to all inventory which is itemized, accounted for,
located and set forth on Schedule 1.1(a) to this Agreement (collectively, the
"INVENTORY");
(b) all Seller's rights in, to and under all agreements, contracts,
leases, license agreements and other executory instruments to which Seller is a
party relating to the Business, and all pending purchase and sales orders
incurred in the ordinary course of the Business, including, but not limited to,
those listed on Schedule 1.1(b) (which Schedule 1.1(b) shall list all such
agreements, contracts, leases, license agreements, other executory instruments
and purchase and sales orders) (the "CONTRACTS");
(c) all transferable guaranties, warranties, indemnities and similar
rights in favor of Seller to the extent related to any Purchased Asset;
(d) all goodwill associated with or attributable to the Business;
(e) all Seller's interest in any Intellectual Property. As used
herein, the term "INTELLECTUAL PROPERTY" shall mean and include: (i) all
trademark rights, business identifiers, trade dress, service marks, trade names,
and brand names; (ii) all copyrights and all other rights associated therewith
and the underlying works of authorship; (iii) all patents and all proprietary
rights associated therewith; (iv) all contracts or agreements granting any
right, title, license or privilege under the intellectual property rights of any
third party; (v) all inventions, mask works and mask work registrations, know
how, discoveries, improvements, designs, trade secrets, shop and royalty rights,
employee covenants and agreements respecting intellectual property and non
competition and all other types of intellectual property; and (vi) all
registrations of any of the foregoing, all applications therefor, all goodwill
associated with any of the foregoing, and all claims for infringement or breach
thereof;
(f) all permits, approvals, qualifications and the like used by
Seller in the conduct of the Business issued by any governmental body or other
instrumentality to the extent assignable by Seller;
(g) all customer lists and records, files and correspondence,
technical information, and all sales, advertising, and promotional literature,
catalogs, artwork, and other items associated with or attributable to the
Business;
(h) all records and files of Seller of every kind including, without
limitation, invoices, customer and vendor lists, blueprints, specifications,
designs, drawings, and operating and marketing plans, and all other documents,
tapes, discs, programs or other embodiments of information of Seller;
(i) the name "Get in the Game," and all rights to use or allow
others to use such name; and
(j) all causes of action relating to the Business arising out of
occurrences before the Closing, and other intangible rights and assets.
SECTION 1.2 EXCLUDED ASSETS. The provisions of Section 1.1
notwithstanding, Seller shall not sell, transfer, assign, convey or deliver to
New Sub, and Purchaser will not purchase or accept the following assets of
Seller (collectively, the "EXCLUDED ASSETS"):
(a) the consideration delivered by Purchaser pursuant to this
Agreement;
(b) Any other item that is not a Purchased Asset.
SECTION 1.3 ASSUMPTION OF LIABILITIES. Subject to the terms and conditions
of this Agreement, at the Closing, Purchaser shall assume and pay, discharge or
perform when due only those liabilities set forth on Exhibit "A" attached hereto
(collectively, the "ASSUMED LIABILITIES"). In particular, the debts of Xxxxxxxxx
and Single as listed on Exhibit "A" will be paid with Stock Consideration as
described in Section 1.4 below. The debts of Xxxx Xxxxxx, Xxxxxxx Single, Xxxx
Xxxx, and Xxxxxx Xxxxx will be paid in cash at Closing
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Without limiting the foregoing, except as set forth on Exhibit "A",
Purchaser shall not be liable for any liability, obligation or claim:
(a) based upon any written or implied warranty or any theory of
product liability, including but not limited to claims for bodily injury and
property damage, with respect to goods sold, leased, processed, manufactured,
consigned, distributed or transferred by Seller prior to the Closing;
(b) for any and all severance or other termination benefits owing to
any employee of Seller arising out of or resulting from severance or termination
by Seller prior to or in connection with the Closing;
(c) for Taxes;
(d) relating to employee benefits or compensation arrangements
existing on or prior to the Closing Date, including, without limitation, any
liability or obligation under any of Seller's employee benefit agreements, plans
or other arrangements;
(e) arising under or in connection with any event occurring or
circumstance existing prior to the Closing with respect to any pension plan,
profit sharing plans or other employee benefit plan of Seller;
(f) to a third party for infringement of such third party's
Intellectual Property arising under or in connection with any event occurring
prior to Closing;
(g) with respect to any action, suit, proceeding, arbitration,
investigation or inquiry, whether civil, criminal or administrative arising
under or in connection with any event occurring prior to Closing;
(h) incurred by Seller in connection with this Agreement and the
transactions contemplated hereby;
(i) relating to indebtedness of Seller for borrowed money;
(j) in connection with any violation by Seller of or failure by
Seller to comply with any statute, law, ordinance, rule or regulation or any
order writ, injunction, judgment, plan or decree of any court arbitrator,
department, commission, board, bureau, agency, authority, instrumentality or
other body, whether federal, state, municipal, foreign or other prior to
Closing; or
(k) arising under or in connection with any of the Excluded Assets.
SECTION 1.4 PURCHASE PRICE. The purchase price for the Purchased Assets
shall be (i) the assumption of the Assumed Liabilities, and (ii) the issuance of
a number of shares of common stock of Purchaser ("IST COMMON Stock") having an
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aggregate fair market value equal to $100,000.00 (the "STOCK CONSIDERATION").
The assumption of the Assumed Liabilities together with the Stock Consideration
and the Performance Consideration, if any, shall collectively be referred to as
the "PURCHASE PRICE." For the purposes of this Agreement, the fair market value
per share of IST Common Stock shall be the average closing price of such shares
on the OTC Bulletin Board during the twenty (20) trading days immediately prior
to the Closing Date (the "PER SHARE FAIR MARKET VALUE").
SECTION 1.5 PERFORMANCE CONSIDERATION.
No later than January 20, 2006, Purchaser agrees to issue to Seller
that number of shares of IST Common Stock (rounded to the nearest whole number)
having an aggregate fair market value equal to the PERFORMANCE CONSIDERATION.
The PERFORMANCE CONSIDERATION shall be calculated by multiplying $100,000 by the
gross revenues for NewSub for its fiscal year ending on December 31, 2005 (to be
determined in accordance with GAAP by Purchaser in its sole and absolute
discretion), divided by $1.2 million. The maximum PERFORMANCE CONSIDERATION
shall be $100,000. The number of shares to be issued shall be calculated using
the PER SHARE FAIR MARKET VALUE as calculated in 1.4 above.
SECTION 1.6 CLOSING.The closing of the purchase and sale of the Purchased
Assets and the assignment and assumption of the Assumed Liabilities (the
"CLOSING") shall take place at the offices of Purchaser's counsel, Xxxxx &
Xxxxxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx on the date
hereof or such other date agreed to by the parties (the "CLOSING DATE").
SECTION 1.7 DELIVERIES AT CLOSING.
(a) Deliveries by Purchaser. At or prior to the Closing, Purchaser
shall deliver or cause to be delivered to Seller the following:
(i) Stock certificates representing that number of
shares of IST Common Stock having a fair market value equal to
$100,000.00;
(ii) any other documents, certificates, instruments or
writings required to be delivered by Purchaser at or before
the Closing pursuant to this Agreement or otherwise.
(b) Deliveries by Seller. At or prior to the Closing, Seller shall deliver
to Purchaser the following:
(i) A Xxxx of Sale; and
(ii) any other documents, certificates, instruments or
writings required to be delivered by the Purchaser at or
before the Closing pursuant to this Agreement or otherwise
required in connection herewith.
SECTION 1.8 NONASSIGNABILITY OF ASSETS. To the extent that the sale,
assignment or transfer to Purchaser of any asset that is intended to be a
Purchased Asset would require any third party approval and such approval shall
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not have been obtained prior to the Closing, at Purchaser's option, the Closing
shall proceed without the sale, assignment or transfer of any such asset and (i)
the asset (and its related liabilities) will not be considered a Purchased Asset
or an Assumed Liability for the purposes hereof unless and until such approval
has been obtained; (ii) the parties shall use their reasonable best efforts to
obtain such approval; and (iii) pending such approval the parties shall
cooperate with each other in any mutually agreeable, reasonable and lawful
arrangement designed to provide Purchaser with the economic and operational
equivalent of the use of such asset and its related liabilities.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to Purchaser that the following are true and correct as
of the date first above written and shall be true and correct on the Closing
Date and shall be unaffected by any investigation heretofore or hereafter made
by Purchaser or any knowledge of Purchaser other than as specifically disclosed
in the Disclosure Schedule delivered to Purchaser at the time of execution of
this Agreement (the "SELLER DISCLOSURE SCHEDULE"):
SECTION 2.2 NO CONFLICT; APPROVALS. Neither the execution and delivery of
this Agreement nor the consummation or performance of any of the transactions
contemplated hereby will (i) violate or conflict with any provision of any
Articles of Incorporation or Bylaws of Seller or any statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which Seller or any of its
respective assets is subject, (ii) except as set forth on Section 2.2 of the
Seller Disclosure Schedule, result in the breach or termination of any provision
of, or create in any party the right to accelerate, terminate, modify or cancel
or exercise any remedy under, any agreement or other instrument or obligation to
which any of the Purchased Assets may be subject, bound or affected, or (iii)
require notice, authorization, consent, exemption, approval or other action of
any public body or authority (including under any "plant closing" or similar
law).
SECTION 2.3 BOOKS AND RECORDS. The material books of account and other
records of the Business, all of which have been made available to Purchaser
prior to the Closing, are complete and accurate in all material respects. Set
forth in Section 2.3 of the Seller Disclosure Schedule is a list of each bank is
which Seller has an account or safe deposit box, the name and number of each
such account or box and the names of all persons authorized to draw thereon or
who have access thereto, with the amounts they are authorized to draw.
SECTION 2.4 TITLE TO THE ASSETS. Except as set forth in Section 2.4 of the
Seller Disclosure Schedule, Seller has and at the Closing will transfer to
Purchaser good and marketable title to the Purchased Assets, free and clear of
all Liens. The Purchased Assets include all rights, properties and other assets
necessary for Seller to conduct the Business in the same manner as its business
has been conducted.
SECTION 2.5 CONTRACTS. Schedule 1.1(b) contains an accurate and complete
list of all Contracts. All Contracts of Seller are freely assignable except as
indicated on Schedule 1.1(b) hereto. Complete and correct copies of all such
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Contracts have been delivered to Purchaser. All such Contracts are valid and
binding, in full force and effect and enforceable in accordance with their
respective terms (subject to bankruptcy, insolvency, fraudulent conveyance,
moratorium and similar laws affecting creditors' rights and general equity
principles). Seller is not in breach or default under any of the Contracts, nor
has there occurred an event or condition which, with the passage of time or
giving of notice (or both) would constitute a breach or default by Seller under
any such Contract, nor, to the best knowledge, information and belief of Seller,
are any of the other parties to such Contracts in breach of default thereunder.
All Contracts (the "GOVERNMENT CONTRACTS") with federal, state, local or foreign
governmental entities or any subdivision thereof (the "GOVERNMENTAL
Authorities") have been performed by the Seller in compliance with all
applicable statutes, rules, regulations, orders, ordinances, laws, decrees and
codes of Governmental Authorities, applicable to contracting with such
Governmental Authorities.
SECTION 2.6 LITIGATION. Except as set forth in Section 2.6 of the Seller
Disclosure Schedule, there is no action, suit, proceeding at law or in equity by
any person or entity, or any arbitration or any administrative or other
proceeding by or before or, to the best of Seller's knowledge, threatened
against or affecting Seller nor has Seller received notice of or otherwise have
knowledge of any investigation by any governmental or other instrumentality or
agency concerning Seller or any of its properties or rights which is or could
reasonably be expected to (i) adversely affect the right or ability of Seller to
carry on the Business as now conducted; (ii) adversely affect the condition,
whether financial or otherwise, of the Business; or (iii) question the validity
of this Agreement or any of Seller's agreements and covenants regarding
transactions contemplated hereby.
SECTION 2.7 TAXES. Seller has filed, or prior to the Closing will timely
file, within the times and within the manner prescribed by law, all federal,
state and local tax returns, information returns, forms, reports, declarations
and all other tax reports and returns ("RETURNS") which are required to be filed
by it as of the Closing with respect to the Business or the Assets. Each Return
is true, correct and complete in all material respects and accurately reflects
or will fully and accurately reflect all required and appropriate liability for
taxes of Seller for the periods covered thereby, and no Return has been amended.
All Taxes payable by or due from Seller prior to the Closing Date with respect
to the Business have been fully and timely paid and those Taxes with respect to
the Business that are not due prior to the Closing Date are fully provided for
in the books and records of Seller. Seller is not currently under audit by any
Taxing Authority and has no outstanding agreements or waivers extending the
statutory period of limitations applicable to any Return. There are no
unresolved audit issues with respect to prior Returns, there are no requests for
rulings or determinations in respect of any Tax pending between the Seller and
any Taxing Authority, and there are no circumstances or pending questions
relating to potential Tax liabilities or claims asserted for Taxes that, if
adversely determined, could result in a Tax liability that would have an adverse
effect on Seller or the Assets for any period. The provision made for Taxes on
the Seller's most recent unaudited balance sheet is sufficient for the payment
of all Taxes, whether or not disputed at the date of the most recent balance
sheet, and for all years and periods prior thereto. Since the date of the
Seller's most recent unaudited balance sheet, Seller has not incurred any Taxes
other than taxes incurred in the ordinary course of business consistent in type
and amount with past practices of Seller.
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SECTION 2.8 INVENTORY. Except for the Inventory of Seller or as stated in
Section 2.8 of the Seller Disclosure Schedule, the Inventory of Seller has been
acquired and maintained by Seller in the ordinary course of the Business and
consists of a quality and quantity useable or saleable in the ordinary course of
the Business, has a commercial value at least equal to the value shown on the
Seller's most recent unaudited balance sheet and is valued in accordance with
GAAP at the lower of cost (on a FIFO basis) or market. Except as set forth in
Section 2.8 of the Seller Disclosure Schedule, all Inventory is located at 0 Xxx
Xxxx Xxxxx Xxxx, Xxxxx Xx, Xxx Xxxxxx.
SECTION 2.9 BROKER'S OR FINDER'S FEES. Seller has not used the services of
a broker in connection with the consummation of the transactions contemplated
hereby. To the extent that any broker is or will be entitled to any commission
or fee, Seller shall be responsible for payment of such commission or fee and
such commission or fee shall not be deemed to be an account payable of Seller
assumed by Purchaser at the Closing.
SECTION 2.10 COMPLIANCE WITH LAWS. Seller has not received any notice from
any governmental entity asserting a violation by Seller of, or ordering Seller
to comply with, any laws, regulations, or governmental pronouncements of any
type, and there are not pending any claims or, to Seller's knowledge,
investigations involving asserted violations thereof. Seller is in compliance in
all material respects with all applicable statutes, rules, regulations,
ordinances, orders, judgments, decrees and governmental pronouncements of each
and every jurisdiction applicable to Seller and has acquired all licenses and
permits required for the operation of the Business. A complete and accurate list
of all such licenses and permits is set forth on Section 2.10 of the Seller
Disclosure Schedule.
SECTION 2.11 DISCLOSURE. There is no matter known to Seller not disclosed
to Purchaser which may have, or is having, an adverse effect Material to the
Business of Seller. The information contained in the Exhibits and Schedules
attached and to be attached to this Agreement and in all other documents
delivered and to be delivered hereunder by Seller to Purchaser is and will be
complete and accurate and, subject to the qualifications and limitations
identified in this Agreement and its related exhibits, schedules, disclosures
and disclaimers, no representation or warranty made or to be made herein or
therein contains or will contain an untrue statement of a material fact or omits
or will omit to state a material fact necessary to make the representations
contained herein or therein not misleading.
SECTION 2.12 INTELLECTUAL PROPERTY. Section 2.12 of the Seller Disclosure
Schedule contains a true and complete list of all Intellectual Property of
Seller. The Intellectual Property is owned by Seller free and clear of all
liens, claims, restrictions and encumbrances of any nature whatsoever, and
Seller has the exclusive right to use the Intellectual Property in the operation
of its business without payment to a third party. Except as set forth in Section
2.12(a) of the Seller Disclosure Schedule, no Intellectual Property infringes or
is infringed upon by any rights of third parties or is involved in any
opposition, invalidation or cancellation action. The Intellectual Property is
sufficient for the operation of Seller's business as currently conducted.
Complete and correct copies of any and all license agreements for the
Intellectual Property have been delivered to Purchaser. All of such license
agreements are valid and binding, in full force and effect and enforceable in
accordance with their respective terms. Neither Seller nor to Seller's
knowledge, any other party thereto is in violation of any of the terms of or in
default under any such license agreements, nor has there occurred any event or
condition which, with the passage of time or giving of notice (or both), would
constitute a violation or default by Seller, nor to Seller's knowledge, any
other party thereunder.
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SECTION 2.13 INVESTMENT
. Seller (i) understands that the shares of IST Common Stock
comprising the Purchase Price have not been, and shall not be, registered under
the Securities Act or under any state securities laws, and are being offered and
sold in reliance upon federal and state exemptions for transactions not
involving any public offering, (ii) is acquiring the shares of IST Common Stock
comprising the Purchase Price solely for its own account for investment
purposes, and not with a view to the distribution thereof, (iii) is a
sophisticated investor with knowledge and experience in business and financial
matters, (iv) has received certain information concerning Purchaser and NewSub
and has had the opportunity to obtain additional information and ask such
questions as desired in order to evaluate the merits and the risks inherent in
holding shares of common stock of Purchaser, (v) is able to bear the economic
risk and lack of liquidity inherent in holding shares of common stock of
Purchaser, and (vi) is an Accredited Investor. "Accredited Investor" has the
meaning set forth in Regulation D promulgated under the Securities Act of 1933,
as amended (the "ACT").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to Seller that the following are true and correct as of
the date first written above and shall be true and correct on the Closing Date
and shall be unaffected by any investigation heretofore or hereafter made by
Seller other than as specifically disclosed in the Disclosure Schedule delivered
to Seller at the time of execution of this Agreement.
SECTION 3.2 ORGANIZATION AND GOOD STANDING. Purchaser is a corporation
duly organized, validly existing and in good standing in the State of
California. New Sub is a corporation duly organized, validly existing and in
good standing in the State of Delaware.
SECTION 3.3 CORPORATE AUTHORITY. Purchaser has full corporate power and
authority to execute, deliver and perform all of its obligations under this
Agreement and the other agreements to be executed, delivered and performed by
Purchaser hereunder; the execution, delivery and performance of this Agreement
has been duly authorized and approved by all required corporate action of
Purchaser; and this Agreement has been duly and validly executed and delivered
by Purchaser and constitutes a valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent conveyance, moratorium and similar laws
affecting creditors' rights and general equity principles.
SECTION 3.4 NO CONFLICT; AUTHORIZATION. Neither the execution and delivery
of this Agreement nor the consummation or performance of any of the transactions
contemplated hereby will violate or conflict with any provision of the Articles
of Incorporation or Bylaws of Purchaser or any statute, regulation, rule,
8
injunction, judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which Purchaser or any of its assets
or properties is subject or any material contract or agreement to which it is a
party. No authorization, consent or approval of any public body or authority or
any third party is necessary to permit the consummation on the part of Purchaser
of the transactions contemplated by this Agreement.
SECTION 3.5 LITIGATION. There is no action, claim, suit or proceeding
pending, or to Purchaser's knowledge threatened, by or against or affecting
Purchaser in connection with or relating to the transactions contemplated by
this Agreement or of any action taken or to be taken in connection herewith or
the consummation of the transactions contemplated hereby.
SECTION 3.6 BROKER'S OR FINDER'S FEES. No agent, broker, person or firm
acting on behalf of Purchaser is or will be entitled to any commission or
broker's or finder's fees from any of the parties hereto or from any person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
ARTICLE IV
CONDITIONS TO PURCHASER'S OBLIGATIONS
SECTION 4.1 CONDITIONS TO PURCHASER'S OBLIGATIONS. Purchaser's obligation
to purchase and acquire the Purchased Assets and take the other actions required
to be taken by Purchaser at the Closing is subject to the conditions set forth
in this Article IV, unless any such condition shall have been waived by
Purchaser in its sole discretion in writing.
SECTION 4.2 TRANSFER DOCUMENTS. Seller shall have delivered to Purchaser
bills of sale, assignments, certificates of title and other appropriate
documents of transfer, and any other documents required hereby in form and
substance reasonably satisfactory to Purchaser transferring the Purchased Assets
to Purchaser. Purchaser's counsel shall have received true copies of all such
documents at or prior to the Closing.
SECTION 4.3 NO LITIGATION THREATENED. No action or proceeding shall have
been instituted or, to the best knowledge, information and belief of Seller,
shall have been threatened before a court or other government body or by any
public authority to restrain or prohibit any of the transactions contemplated
hereby or which would have a material adverse effect on the Business.
SECTION 4.4 APPROVALS AND CONSENTS. Consents of the third parties to the
assignment to Purchaser of all Contracts set forth on Schedule 1.1(b), and all
other governmental consents and approvals, if any, necessary to permit the
consummation of the transactions contemplated by this Agreement shall have been
received by Purchaser in a form and substance acceptable to Purchaser.
SECTION 4.5 ABSENCE OF LIENS. There shall be no Liens on the Purchased
Assets except for Liens for current taxes not yet due and payable and except for
Liens securing the payment of any of the Assumed Liabilities or which will be
released upon payments to Seller's creditors pursuant to payoff letters
delivered to Purchaser and its counsel not less than one business day prior to
Closing.
9
SECTION 4.6 MATERIAL ADVERSE CHANGES. There shall not have occurred after
the date hereof, from and to the Closing, any events, facts or circumstances
which individually or together with all such other events, facts or
circumstances have had or which could have an adverse effect Material to the
Business.
SECTION 4.7 DUE DILIGENCE; SCHEDULES. Purchaser shall have completed to
its sole satisfaction its business, financial and legal due diligence
investigation of Seller and shall have found, in the Purchaser's sole
discretion, the Seller's prospects, business, operations, assets, commitments,
rights and liabilities to be satisfactory.
SECTION 4.8 EMPLOYMENT AGREEMENT. Xxxx Xxxxxx and Purchaser shall have
entered into an employment agreement with Purchaser, substantially in the form
of Exhibit "B" hereto, under which Xxxx Xxxxxx will serve as Vice President of
Business Development of IST and President of Purchaser.
SECTION 4.9 NON-FOREIGN AFFIDAVIT. Seller shall have furnished to
Purchaser an affidavit, in form reasonably satisfactory to Purchaser, of Seller
stating under penalty of perjury Seller's United States taxpayer identification
number and that Seller is not a foreign person within the meaning of Section
1445(b)(2) of the Code, and containing all such other information as is required
to comply with the requirements of such Section.
SECTION 4.10 BANK ACCOUNTS. Except for the bank account designated by
Seller to receive the purchase price hereunder, which shall have been opened
since the date hereof and shall not have been used in connection with the
Business, Seller shall have transferred and assigned to Purchaser, effective as
of the Closing Date, (A) all accounts listed on Section 2.3 of the Seller
Disclosure Schedule, whether or not such accounts are held in the name of
Seller, and (B) any power of attorney from Seller with respect to such accounts
to Purchaser.
SECTION 4.11 XXXX OF SALE. Seller shall have executed and delivered to
Purchaser a Xxxx of Sale substantially in the form of Exhibit "D" hereto.
SECTION 4.12 OTHER DOCUMENTS. Seller and Stockholder shall have delivered
all other documents, instruments or writings required to be delivered to the
Purchaser at or prior to the Closing pursuant to this Agreement and such other
certificates of authority and documents as the Purchaser may reasonably request
in form and substance reasonably satisfactory to Purchaser and Purchaser's
counsel.
ARTICLE V
CONDITIONS TO SELLER'S OBLIGATIONS
SECTION 5.1 CONDITIONS TO SELLER'S OBLIGATIONS. Seller's obligation to
sell and assign the Purchased Assets and take the other actions required to be
taken by Seller at the Closing are subject to receipt by Seller of all of the
documents required to be delivered by Purchaser pursuant to this Article V and
compliance by Purchaser with the following conditions, unless any such condition
shall have been waived in writing by Sellers in its sole discretion.
10
SECTION 5.2 NO LITIGATION THREATENED. No action or proceeding shall have
been instituted or, to the best knowledge, information and belief of Purchaser,
shall have been threatened before a court or other government body or by any
public authority to restrain or prohibit any of the transactions contemplated
hereby.
ARTICLE VI
COVENANTS
SECTION 6.1 FURTHER ASSURANCES. From time to time after the Closing, each
of the parties shall execute and deliver such documents, further instruments of
sale, transfer, assignment and delivery and other papers and take such further
actions as may be reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated by this Agreement, including the
transfer, assignment and delivery of the Purchased Assets to the Purchaser.
Without limiting the generality of the foregoing, the Seller shall take any and
all action necessary to ensure that the New Sub has good and marketable title to
all property and assets, tangible and intangible, and all leases, licenses and
other agreements, which are necessary to permit the New Sub to carry on, or are
currently used or held for use in, the business of the Seller as presently
conducted.
SECTION 6.2 DISCLOSURE. Neither Seller, Purchaser, nor any of their
respective employees, agents or representatives shall make any public disclosure
or announcement concerning the transactions provided for herein other than (i) a
joint press release in agreed form issued by Purchaser and Seller if, in the
opinion of counsel for Purchaser, such public disclosure is required by the
Securities and Exchange Commission or OTC Bulletin Board, or (ii) any other
disclosures or announcements required, in the good faith judgment of Purchaser,
to be made by law. As to any such disclosures required by law a copy shall be
provided to all parties at least five (5) business days prior to the
dissemination thereof by a party.
SECTION 6.3 TAX MATTERS.
(a) Seller and Purchaser agree to furnish or cause to be furnished
to each other, upon request, as promptly as reasonably practicable, such
information and assistance (including access to books and records) relating to
the Business or the Purchased Assets as is reasonably necessary for the
preparation of any Tax return or claim for refund, the making of any election
relating to Taxes, the preparation for any audit and the prosecution or defense
of any claim, suit or proceeding relating to any Tax. Seller and Purchaser agree
to (i) retain all books and records with respect to Tax matters concerning the
Business and any taxable period beginning before the Closing Date for a period
of at least six years following the Closing Date and, at the end of such, give
each other at least ten days' prior written notice before transferring,
destroying or discarding any such books and records and, if the other party so
requests, allow the other party to take possession of such books and records.
Seller and Purchaser shall cooperate with each other in the conduct of any audit
or other proceeding relating to taxes involving the Assets or the Business.
11
(b) Any Taxes of whatsoever kind or nature which may be payable in
connection with the sale of the Purchased Assets to be transferred to Purchaser
hereunder ("TRANSFER TAX"), shall be borne solely by Seller who shall certify to
Purchaser that all such Taxes have been paid and hold Purchaser harmless
therefrom. Seller and Purchaser shall cooperate in providing each other with any
appropriate resale exemption certifications and other similar documentation. The
party that is required by applicable law to make the filings, reports or returns
with respect to any applicable Transfer Taxes shall do so, and the other party
shall cooperate with respect thereto as necessary.
SECTION 6.4 NON-COMPETITION; NON-SOLICITATION. Without the express prior
written consent of Purchaser and New Sub, Seller shall not at any time during
the three-year period immediately following the Closing Date, on their own
behalf or on behalf of or for the benefit of any Competing Business (as
hereinafter defined), do any of the following:
(a) establish, acquire or engage in any Competing Business within
the United States or its territories; or
(b) directly or indirectly, solicit, contact, call upon, communicate
with or attempt to communicate with any customer or prospect of Seller,
Purchaser or New Sub or any representative of any customer or prospect of
Seller, Purchaser or New Sub, with a view to selling or providing any product,
equipment or service similar to that sold, provided or under development by
Purchaser, Seller or New Sub (except as an employee of Purchaser or New Sub); or
(c) directly or indirectly, solicit, entice, or attempt to do the
same to, any employee of Purchaser or New Sub or provide information about any
employee of Purchaser or New Sub to others for the purpose of soliciting any
such employee to leave his/her employment with Purchaser or New Sub to work for
any Competing Business.
For purposes of this Agreement, "COMPETING BUSINESS" shall mean any
business or enterprise, however conducted or organized, whether by Seller, or by
others, which is the same or essentially the same as, or which performs any
substantial part of the business of Purchaser, New Sub or Seller. The parties
acknowledge and agree that Purchaser, New Sub and Seller are involved in the
business of researching and developing, creating, designing, manufacturing,
marketing, distributing and selling Student Athlete, Summer Camp, and Collegiate
Preparatory manuals, information, guidelines, seminar production services,
software, and related products.
Seller shall not use the name "Get in the Game" or any derivative thereof
in any Competing Business.
SECTION 6.5 CONFIDENTIALITY. Each of Seller, Purchaser and New Sub agree
to treat as confidential and as a trade secret pursuant to and in accordance
with the Uniform Trade Secrets Act (Florida Statutes 688, as amended) any and
all business information of the other party in its possession, in each case by
using the same degree of care as is used for its own trade secrets, but no less
than a reasonable standard of care, to prevent the unauthorized use,
dissemination, misappropriation or disclosure of such trade secrets. Neither
party may misappropriate the business information of the other party in its
possession. For purposes hereof, "trade secrets" shall include all supplier and
customer lists and files, techniques, processes, know how, advertising,
distribution and sales methods, sales and profit figures, budgets, capital
spending plans, acquisition and divestiture plans, marketing data, financial
information, employee lists, real property information (leasing or otherwise)
and the like.
12
SECTION 6.6 SALES AND USE TAXES. Seller will provide Purchaser with proof
of filing of all sales and/or use taxes for the last three years and proof of
payment of the tax shown to be due thereon. For the reporting period ending on
the Closing Date, Seller will file the sales and use tax returns for the sales
and purchases at the Premises for such period on or before the due date and will
provide Purchaser with copies of such returns and proof of payment of the taxes
due thereon.
SECTION 6.7 CONSENT OF SELLER. Seller will provide, at Purchaser's
expense, all consents necessary in order for Purchaser to comply with any filing
requirements of Purchaser pursuant to the rules and regulations of the
Securities and Exchange Commission and OTC Bulletin Board.
SECTION 6.8 IST COMMON STOCK. Seller and Stockholder acknowledge that the
certificates representing shares of IST Common Stock comprising the Purchase
Price shall be imprinted with a legend substantially in the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE, AND HAVE BEEN ISSUED IN RELIANCE ON
EXEMPTIONS, FROM REGISTRATION THEREUNDER. THE SECURITIES EVIDENCED BY THIS
CERTIFICATE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHOUT REGISTRATION UNDER THE ACT OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS, UNLESS THE CORPORATION RECEIVES AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE.
If Seller desires to transfer any of the shares of common stock of IST
comprising the Purchase Price, Seller must furnish Purchaser with a written
opinion satisfactory to Purchaser in form and substance from counsel
satisfactory to Purchaser by reason of experience to the effect that the holder
may transfer such shares as desired without registration under the Securities
Act.
13
ARTICLE VII
INTENTIONALLY OMITTED
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
SECTION 8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties of the Seller in this
Agreement or any document delivered pursuant hereto shall survive the Closing
for a period beginning on the Closing Date and ending on the third anniversary
of the Closing Date and shall terminate and be of no further force or effect as
of the day after such date (the "EXPIRATION DATE"), except that the
representations and warranties in Sections 2.4 shall survive the Closing forever
and shall not terminate.
(b) The covenants and agreements of the Seller and Purchaser in this
Agreement or any document delivered pursuant thereto shall survive the Closing
and shall be fully effective and enforceable for the periods therein indicated
or where not indicated forever.
SECTION 8.2 SELLER'S OBLIGATION TO INDEMNIFY.
(a) Subsequent to the Closing, Seller shall indemnify and hold
harmless the Purchaser and New Sub and their respective directors, officers,
employees, agents, affiliates and assigns, other than any Seller, (collectively,
the "PURCHASER INDEMNIFIED PERSONS") from and against all losses, liabilities,
damages, deficiencies, costs or expenses, including interest and penalties
imposed or assessed by any judicial or administrative body and reasonable
attorneys' fees, whether or not arising out of third-party claims and including
all amounts paid in investigation, defense or settlement of the foregoing
(collectively, "LOSSES") suffered or incurred by any Purchaser Indemnified
Person based upon, arising out of or otherwise in respect of (i) any inaccuracy
in or breach of (without regard to any knowledge, dollar threshold, materiality
or Material Adverse Effect qualifications contained therein) any representation
or warranty of the Seller in this Agreement or in any document delivered
pursuant hereto, (ii) any breach of (without regard to any knowledge, dollar
threshold, materiality or Material Adverse Effect qualifications contained
therein) any covenant or agreement of the Seller in this Agreement or in any
document delivered pursuant hereto; provided that in determining the amount of
any Loss suffered or incurred by any Purchaser Indemnified Person hereunder,
such Loss shall be reduced by the economic benefit to any Purchaser Indemnified
Person, if any, occurring or reasonably anticipated to occur from any applicable
insurance coverage and the benefits actually received under federal, state and
local Tax laws then applicable and the allowance of an appropriate discount for
timing factors.
(b) No indemnification shall be payable pursuant to Section 8.2(a)
with respect to any inaccuracy or breach of any representation or warranty or
breach of any covenant or agreement after termination thereof in accordance with
Section 8.1, except with respect to claims made prior to such termination
pursuant to Section 8.7 but not then resolved (such representation, warranty,
covenant or agreement surviving with respect to such claim until resolution of
such claim).
14
SECTION 8.3 LIMITATIONS ON SELLER'S INDEMNIFICATION. Notwithstanding any
provision of this Agreement to the contrary:
(a) The limitations of Sections 8.2(b) and 8.3(b) shall not apply in
the case of a fraudulent or intentional misrepresentation or breach by the
Seller.
(b) The Seller shall have no obligation to indemnify any Purchaser
Indemnified Person pursuant to Section 8.2(a) until the aggregate amount of the
Losses subject thereto exceed $5,000.00 (the "DEDUCTIBLE AMOUNT"), after which,
subject to the next sentence of this section, the obligation of the Seller shall
be to indemnify the Purchaser Indemnified Persons to the full extent of such
Losses in excess of the Deductible Amount. Subject to the provisions of Section
8.3(a), the indemnification obligations under this Section 8.3(b) and shall be
the sole and exclusive remedy of the Purchaser Indemnified Persons with respect
to any Losses incurred by any Purchaser Indemnified Persons relating to or in
connection with the transactions contemplated by this Agreement and the
aggregate liability of the Seller for indemnification hereunder shall be limited
to the sum of the Purchase Price (the "APPLICABLE CAP"). (c) Each party hereto
shall use all reasonable efforts to mitigate the amount of any Loss.
SECTION 8.4 SURVIVAL OF PURCHASER OBLIGATIONS.
(a) The representations and warranties of the Purchaser in this
Agreement or any document delivered pursuant hereto shall survive the Closing
for a period beginning on the Closing Date and ending on the Expiration Date and
shall terminate and be of no further force or effect as of such date, except
that the representations and warranties in Section 3.2 shall survive the Closing
forever and shall not terminate.
(b) The covenants and agreements of the Purchaser in this Agreement
or any document delivered pursuant hereto shall survive the Closing and shall be
fully effective and enforceable for the periods therein indicated or where not
indicated, for the periods ending upon the expiration of the last statute of
limitations applicable to any claim arising under any such covenant or
agreement.
SECTION 8.5 PURCHASER OBLIGATION TO INDEMNIFY.
(a) Subsequent to the Closing, the Purchaser shall indemnify and
hold harmless the Seller from and against all Losses suffered or incurred by any
Seller or Stockholder based upon, arising out of or otherwise in respect of (i)
any inaccuracy in or breach of any representation or warranty of the Purchaser
in this Agreement or any document delivered pursuant hereto or (ii) any breach
of any covenant or agreement of the Purchaser in this Agreement or any document
delivered pursuant hereto; provided that in determining the amount of any Loss
suffered or incurred by Seller hereunder, such Loss shall be reduced by the
economic benefit to Seller, if any, occurring or reasonably anticipated to occur
from any applicable insurance coverage and the benefits actually received under
federal, state and local Tax laws then applicable and the allowance of an
appropriate discount for timing factors.
15
(b) No indemnification shall be payable pursuant to Section 8.5(a)
with respect to any inaccuracy or breach of any representation or warranty or
breach of any covenant or agreement after termination thereof in accordance with
Section 8.4, except with respect to claims made prior to such termination
pursuant to Section 8.7 but not then resolved (such representation, warranty,
covenant or agreement surviving with respect to such claim until resolution of
such claim).
SECTION 8.6 LIMITATIONS ON PURCHASER INDEMNIFICATION.
(a) The limitations of Sections 8.5(b) and 8.6(b) shall not apply in
the case of a fraudulent or intentional misrepresentation or breach by the
Purchaser.
(b) The Purchaser shall have no obligation to indemnify the Seller
pursuant to Section 8.5(a) until the aggregate amount of the Losses subject
thereto exceed the Deductible Amount, after which, subject to the following
sentence, the obligation of the Purchaser shall be to indemnify the Seller to
the full extent of such Losses in excess of the Deductible Amount. Subject to
the provisions of Section 8.6(a), the indemnification obligations of the
Purchaser under this Section 8.6(b) shall be the sole and exclusive remedy of
the Seller with respect to any Losses incurred by any Seller relating to or in
connection with the transactions contemplated by this Agreement and the
aggregate liability of the Purchaser for indemnification hereunder shall be
limited to the Applicable Cap; provided, however, that nothing contained in this
Section 8.6(b) shall limit the Purchaser's obligation to pay the Purchase Price
pursuant to Section 1.1.
SECTION 8.7 PROCEDURES RELATING TO INDEMNIFICATION.
(a) An indemnified Person under Sections 8.2(a) or 8.5(a) (the
"Indemnified Party") shall give prompt written notice to the indemnifying party
(the "Indemnifying Party") of any Loss in respect of which such Indemnified
Party is seeking indemnification under Sections 8.2(a) or 8.5(a), specifying in
reasonable detail the nature of such Loss, the section or sections of this
Agreement to which the Loss relates, and the amount of such Loss (or if not then
determinable, its best estimate of the amount of such Loss). Any such notice
given by any Indemnified Party under Section 8.7(a) shall be given to the
Seller.
(b) With respect to any Loss, the Indemnifying Party shall have 30
business days from receipt of notice from the Indemnified Party of such Loss
within which to respond thereto. If the Indemnifying Party does not respond
within such 30 business day period, the Indemnifying Party shall be deemed to
have accepted responsibility to make payment and shall have no further right to
contest the validity of such Loss.
(c) The Indemnifying Party shall promptly pay the Indemnified Party
any amount due under this Article VIII, which payment may be accomplished in
whole or in part, at the option of the Indemnified Party, by the Indemnified
Party setting off any amount owed to the Indemnifying Party by the Indemnified
Party.
16
SECTION 8.8 CHARACTERIZATION OF INDEMNIFICATION PAYMENTS. Any payments
made pursuant to Article VIII of this Agreement shall be treated for all Tax
purposes as adjustments to the consideration to be paid hereunder and no party
or any of its Affiliates shall take any position on a Tax Return or in any
proceeding with any taxing authority contrary to such treatment, unless
otherwise required by law.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings unless the context otherwise requires.
(a) "Affiliate" means any Person who controls, is controlled by or
is under common control with Seller, Stockholder or Purchaser, as the case may
be.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "GAAP" means generally accepted accounting principles utilized
in the United States of America, consistently applied.
(d) "Knowledge," "Information" or "Belief" means, with respect to
Seller or Purchaser, the actual knowledge of their respective executive officers
after they have made due and diligent inquiry as to the matters that are the
subject of such representations and warranties.
(e) "Material to the Business" means material to the business,
assets, properties, operations, results of operations, or financial condition of
Seller, taken as a whole.
(f) "Ordinary Course of Business" means the conduct of Seller's
business and operations in the ordinary course in a manner consistent with past
custom and practices.
(g) "Person" shall mean and include an individual, a partnership, a
joint venture, a corporation, a limited liability company, a trust, an
unincorporated organization, a government, and any other legal entity.
(h) "Tax" means (i) any net income, alternative or add-on minimum
tax, gross income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, profits, license, registration, recording, documentary,
conveyancing, gains, withholding on amounts paid to or by the Seller, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom duty or other tax, governmental fee
or other like assessment or charge of any kind whatsoever, together with any
interest, penalty, addition to tax or additional amount imposed by any
governmental authority or (ii) liability for the payment of any amounts of the
type described in (i) as a result of being party to any agreement or any express
or implied obligation to indemnify any other Person.
(i) "Taxing Authority" means any governmental authority responsible
for the imposition of any Tax (domestic or foreign).
17
SECTION 9.2 PROFESSIONAL EXPENSES. Seller, on the one hand, and Purchaser,
on the other hand, shall each pay all of its own professional expenses relating
to negotiating, drafting and closing the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of its
respective counsel, financial advisers, investment bankers and accountants,
whether or not the transactions contemplated hereby are consummated.
SECTION 9.3 GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Florida
without giving effect to conflicts of laws principles.
SECTION 9.4 JURISDICTION. Any judicial proceeding brought against any of
the parties to this Agreement on any dispute arising out of this Agreement or
any matter related hereto shall be brought in the appropriate courts of the
State of Florida or the United States District Court for the Middle District of
Florida. By execution and delivery of the Agreement, each of the parties to this
Agreement consents to the exclusive jurisdiction of the aforesaid courts, waives
any objection to venue therein and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement. Process in any such
proceeding may be served on any party hereto anywhere. The prevailing party in
any such proceeding shall be entitled to an award of its attorney's fees,
paralegal fees, costs and expenses incurred at the trial and appellate levels
and in any proceedings in Bankruptcy Court. ANY RIGHT TO TRIAL BY JURY WITH
RESPECT TO ANY CLAIM OR PROCEEDING RELATED TO OR ARISING OUT OF THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY IS WAIVED.
SECTION 9.5 CAPTIONS. The Article and Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
SECTION 9.6 NOTICES. Any notice or other communications required or
permitted hereunder shall be sufficiently given if delivered in person or sent
by express mail or by registered or certified mail, postage prepaid, addressed
as follows:
(i) If to Seller:
Xxxxxxx X. Single
0 Xxx Xxxx Xxxxx Xxxx
Xxxxx Xx, XX 00000
with a copy to:
________________________________
________________________________
________________________________
Attention:
18
(ii) If to Purchaser or New Sub:
Innovative Software Technologies, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx, Chief Financial Officer
with a copy to:
Xxxxx & Lardner LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxx, Esquire
or such other address as shall be furnished in writing by any such party in
accordance with this Section 9.6, and such notice or communication shall be
deemed to have been given as of the date so personally delivered or received by
mail.
SECTION 9.7 PARTIES IN INTEREST. This Agreement may not be transferred,
assigned, pledged or hypothecated by any party hereto, other than by operation
of law. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement. Nothing expressed or referred to herein is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
hereunder.
SECTION 9.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which taken together
shall constitute one instrument.
SECTION 9.9 ENTIRE AGREEMENT. This Agreement, including the Schedules,
certificates and other documents referred to herein which form a part hereof,
contains the entire understanding of the parties hereto with respect to the
subject matter contained herein and therein. This Agreement supersedes all prior
agreements and understandings (oral or written) between the parties with respect
to such subject matter. The parties hereto acknowledge and agree that the only
representations and warranties made by the parties in connection with the
transactions contemplated hereby are those expressly made in writing herein
(including the exhibits and schedules hereto and the certificates and other
agreements delivered in accordance herewith). No oral representations or
warranties have been made or implied by any party hereto.
SECTION 9.10 AMENDMENTS; WAIVERS. This Agreement may only be amended by an
agreement in writing signed by Purchaser and Seller. Neither the failure nor any
delay by any party in exercising any right hereunder will operate as a waiver of
such right, and no single or partial exercise of any such right will preclude
any other or further exercise of such right or the exercise of any other right.
Waiver of the benefit of any provision of this Agreement must be in writing to
be effective. No due diligence investigation conducted by the representatives of
Purchaser shall be deemed to constitute a waiver by Purchaser of any
representations, warranties, covenants or other obligations contained in this
Agreement.
19
SECTION 9.11 SEVERABILITY. In case any provision in this Agreement shall
be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby. Any provision held invalid, illegal or
unenforceable in part will remain in full force and effect to the extent not
held invalid, illegal or unenforceable.
SECTION 9.12 RULES OF CONSTRUCTION. The normal rules of construction which
require the terms of an agreement to be construed most strictly against the
drafter of such agreement are hereby waived since each party has been
represented by counsel in the drafting and negotiation of this Agreement.
SECTION 9.13 RISK OF LOSS. Risk of loss of, or damage or destruction to,
the Purchased Assets shall be borne by Seller until the Closing. In the event of
damage or destruction to the Assets, Seller shall promptly notify Purchaser. If
the loss of, or damage or destruction to, the Purchased Assets is
inconsequential and immaterial, and the Purchaser is able to obtain the full
benefit of its bargain, the Purchaser shall not have the right to terminate this
Agreement.
20
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the date and year first above written.
"PURCHASER" "SELLER"
INNOVATIVE SOFTWARE TECHNOLOGIES, INC. XXXXXXX X. SINGLE
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Single
--------------------- ---------------------
Xxxxx X. Xxxxxxxx Xxxxxxx X. Single
Chief Executive Officer Proprietor
"NEW SUB"
GET IN THE GAME, INC.
By: /s/Xxxxxxxxxxx X. Xxxxx
-----------------------
Xxxxxxxxxxx X. Xxxxx
Chief Financial Officer, Treasurer
21
SCHEDULE 1.1(A)
INVENTORY
All brochures, literature, packages, seminar materials, and other materials,
regardless of form or media (including electronic media), relating to, used in,
or usable in the Business.
SCHEDULE 1.1(B)
CONTRACTS
1. Contract with A Game (Xxxx Xxxxxxxx and Xxxx Xxxxxx) to furnish
"Student-Athlete Survival Guide" and curriculum updates, a College Prep
Notebook and a Play You A Game Poster.
DISCLOSURE SCHEDULE 2.12
INTELLECTUAL PROPERTY
1. A one-hour introductory seminar given free to high school students and
their parents.
2. A three-hour basic workshop for parents and freshman through senior (first
semester) students.
3. An advanced three-hour marketing and financial aid workshop.
4. "Personal Coaching" a one-on-one program designed for students and their
parents.
5. A DVD presentation to sports camps, clinics and conventions during June,
July and August.
6. "Mental Edge Training" Coaches Manual.
7. Program Leader Training Guide.
EXHIBIT A
DEBT TO BE ASSUMED IN TRANSACTION
CREDITOR PRINCIPAL
-------- ---------
Xxxxx Xxxxxxxxx $ 30,000
Xxxx Xxxxxx 5,000
Xxxxxxx Single 21,500
Xxxx Xxxx 12,500
Xxxxxx Xxxxx 12,000
Xxxx Xxxxxx 60,000
---------------
$ 141,000
EXHIBIT B
EMPLOYMENT AGREEMENT
FOR
XXXX XXXXXX
2
EXHIBIT C
XXXX OF SALE
3
