ASSET PURCHASE AGREEMENT BETWEEN ACS TECHNOLOGIES GROUP, INC. AND FINDEX.COM, INC. October 18, 2007
Exhibit
10.27
BETWEEN
ACS
TECHNOLOGIES GROUP, INC.
AND
XXXXXX.XXX,
INC.
October
18, 2007
TABLE
OF CONTENTS
Page
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1. DEFINITIONS
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1
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2. BASIC
TRANSACTION
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3
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(a) Purchase
and Sale of Assets
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3
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(b) Acquired
Assets
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3
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|
(c) Liabilities
|
5
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(d) Assigned
Contracts
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5
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(e) Purchase
Price
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6
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(f) The
Closing
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6
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(g) Deliveries
at the Closing
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6
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(h) Further
Assurances
|
7
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|
3. REPRESENTATIONS
AND WARRANTIES OF THE SELLER
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7
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|
(a) Organization
of Seller
|
7
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|
(b) Authorization
of Transaction
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7
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(c) Noncontravention
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7
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(d) Brokers'
Fees
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8
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(e) Title
to Acquired Assets
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8
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(f) Software
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8
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(g) Online
Properties
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8
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(h) Inventories
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8
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(i) Proprietary
Rights
|
9
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(j) Non-Infringement
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9
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(k) Legal
Compliance
|
9
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(l) Contracts
|
9
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(m) Litigation
|
10
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(n) Product
Warranty
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10
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(o) Product
Liability
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10
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(p) Customer
Base
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10
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(q) Accounts
Receivable
|
10
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(r) Disclosure
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11
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4. REPRESENTATIONS
AND WARRANTIES OF THE BUYER
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11
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(a) Organization
of Buyer
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11
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(b) Authorization
of Transaction
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11
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(c) Xxxxxxxxxxxxxxxx
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00
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(x) Brokers’
Fees
|
11
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5. INTENTIONALLY
DELTED
|
11
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6. ADDITIONAL
CLOSING DOCUMENTS OR ACTIONS
|
11
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(a) Additional
Closing Documents or Actions of Seller
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11
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(b) Additional
Closing Documents or Actions of Buyer
|
12
|
i
7. POST-CLOSING
COVENANTS
|
12
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8. INDEMNIFICATION
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12
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(a) Indemnification
by Seller
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12
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(b) Indemnification
by Buyer
|
13
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(c) Notice
of Claim
|
13
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(d) Defense
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14
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(e) Time
for Claims
|
14
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(f) Reduction
by Insurance Proceeds
|
14
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9. MISCELLANEOUS
|
14
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(a) Press
Releases and Public Announcements
|
14
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(b) No
Third-Party Beneficiaries
|
14
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(c) Entire
Agreement
|
14
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(d) Succession
and Assignment
|
15
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(e) Counterparts
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15
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(f) Headings
|
15
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(g) Notices
|
15
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(h) Governing
Law
|
16
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|
(i) Amendments
and Waivers
|
16
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|
(j) Severability
|
16
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(k) Expenses
|
16
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(l) Construction
|
16
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(m) Incorporation
of Exhibits and Schedules
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17
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(n) Submission
to Jurisdiction
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17
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(o) Arbitration
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17
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Exhibit
A
- Form of Assignment of Intellectual Propert
Exhibit
B-1 - Form of Opinion of Counsel to Seller (X.X. Xxxxxxxx, PLLC)
Exhibit
B-2 - Form of Opinion of Counsel to Seller (Xxxxxx Law, PC, LLO)
Exhibit
C
- Form of General Assignment, Xxxx of Sale and Assumption of Liabilities
Agreement
Exhibit
D
- Product Warranties
Exhibit
E
- Form of Partial Assignment of License Agreement (with Riverdeep,
Inc.)
Exhibit
F
- Form of Agreement between Xxxxxx.xxx, Inc. and Riverdeep, Inc.
Exhibit
G
- Form of Contract for Consulting Services
Schedule
2(b)(i) - Software
Schedule
2(b)(viii) - Assigned Contracts
Purchase
Price Allocation Schedule
Disclosure
Schedule
ii
THIS
AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO
SECTIONS
15-48-10 THROUGH 00-00-000 OF THE SOUTH CAROLINA CODE
THIS
ASSET PURCHASE AGREEMENT (together with all Schedules and Exhibits hereto,
this
“Agreement”), dated as of the 18th day of October, 2007, by and between ACS
TECHNOLOGIES GROUP, INC., a South Carolina corporation (the "Buyer"), and
XXXXXX.XXX, INC., a Nevada corporation (the "Seller"). Buyer and Seller are
referred to collectively herein as the "Parties."
W
I T N E
S S E T H:
WHEREAS,
Seller desires to sell certain of its assets, including certain computer
software and know-how related thereto, in accordance with the terms and
conditions of this Agreement; and
WHEREAS,
Buyer desires to purchase such assets in accordance with the terms and
provisions hereof.
NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants,
promises and agreements hereinafter set forth, and for other good and valuable
consideration set forth hereinbelow, the Parties hereto hereby agree as
follows:
1. DEFINITIONS.
“Accounts
Receivable”
has
the
meaning set forth in Section
2(b)(vii)
below.
“Acquired
Assets”
has
the
meaning set forth in Section
2(b)
below.
“Assigned
Contracts”
has
the
meaning set forth in Section
2(b)(viii)
below.
“Assumed
Liabilities”
has
the
meaning set forth in Section
2(c)(i)
below.
“Basis”
means
any past or present fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or
transaction that forms or should form the basis for any specified
consequence.
“Business
Line”
means
the business of Seller related to developing and licensing church management
and
administration software titles under the name Membership
Plus.
“Buyer”
has
the
meaning set forth in the preface above.
“Closing”
has
the
meaning set forth in Section
2(f)
below.
1
“Closing
Date”
has
the
meaning set forth in Section
2(f)
below.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Consulting
Services Agreement”
has
the
meaning set forth in Section
6(a)(iv)
below.
“Disclosure
Schedule”
has
the
meaning set forth in Section
3
below.
“Distribution
Agreements”
has
the
meaning set forth in Section
2(d)(i)
below.
“Governmental
Authority”
means
any federal, state, local, municipal, foreign, or other government, or any
governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, official, or entity and any court
or
other tribunal).
“Inventories”
has
the
meaning set forth in Section
2(b)(iii)
below.
“Knowledge”
means
actual knowledge after reasonable investigation.
“Liability”
means
any direct or indirect, primary or secondary, liability, indebtedness,
obligation, penalty, cost or expense (including costs of investigation,
collection and defense), claim, deficiency, guaranty or endorsement of or by
any
Person of any type, whether known or unknown, accrued or unaccrued, absolute
or
contingent, liquidated or unliquidated, matured or unmatured, or otherwise,
and
whether due or to become due.
“Lien”
means
any lien, mortgage, pledge, security interest, option, right of first refusal,
charge, claim or encumbrance or other restrictions of any kind or nature, except
for (a) liens for Taxes not yet due and payable and (b) liens for assessments
and other governmental charges or of landlords, carriers, warehouseman,
mechanics and material men incurred in the Ordinary Course of Business, in
each
case for sums not yet due and payable or due but not delinquent.
“Material
Adverse Effect”
means,
with respect to any Person, any state of facts, development, event,
circumstance, condition, occurrence or effect that, individually or taken
collectively with all other preceding facts, developments, events,
circumstances, conditions, occurrences or effects (a) is materially adverse
to
the condition (financial or otherwise), business, operations or results of
such
Person, or (b) impairs the ability of such Person to perform its obligations
under this Agreement.
“Online
Properties”
has
the
meaning set forth in Section
2(b)(ii)
below.
“Ordinary
Course of Business”
means
the ordinary course of business consistent with past custom and practice
(including with respect to quantity and frequency).
“Party”
has
the
meaning set forth in the preface above.
2
“Person”
means
a
natural person or any legal, commercial or Governmental Authority, including
without limitation any corporation, general partnership, joint venture, limited
partnership, limited liability company, trust, business association, group
acting in concert, or any person acting in a representative
capacity.
“Proprietary
Rights”
has
the
meaning set forth in Section
2(b)(iv)
below.
“Purchase
Price”
has
the
meaning set forth in Section
2(e)
below.
“Retained
Liabilities”
has
the
meaning set forth in Section
2(c)(ii)
below.
“Riverdeep
Agreement”
has
the
meaning set forth in Section
6(a)(ii)
below.
“Riverdeep
Assignment”
has
the
meaning set forth in Section
6(a)(ii)
below.
“Seller”
has
the
meaning set forth in the preface above.
“Software”
has
the
meaning set forth in Section
2(b)(i)
below.
“Taxes”
means
any federal, state, county, local, foreign or other tax, charge, imposition
or
other levy (including interest or penalties thereon) including without
limitation income taxes, estimated taxes, excise taxes, sales taxes, use
taxes,
gross receipts taxes, franchise taxes, taxes on earnings and profits, employment
and payroll related taxes, property taxes, real property transfer taxes,
Federal
Insurance Acquisitions Act taxes, any taxes or fees related to unclaimed
property, taxes on value added and import duties, whether or not measured
in
whole or in part by net income, imposed by the United States or any political
subdivision thereof or by any jurisdiction other than the United States
or any
political subdivision thereof.
“Third
Party Intellectual Property Rights”
has
the
meaning set forth in Section 3(j) below.
“Transaction
Documents”
means
each of this Agreement, the Consulting Services Agreement, the Riverdeep
Assignment, the Riverdeep Amendment, and each other document, instrument,
and
certificate delivered in connection
therewith.
2. BASIC
TRANSACTION.
(a) Purchase
and Sale of Assets.
On and
subject to the terms and conditions of this Agreement, at the Closing, Buyer
agrees to purchase from Seller, and Seller agrees to sell, transfer, convey,
and
deliver to Buyer, all of the Acquired Assets for the consideration specified
below in this Section
2.
(b) Acquired
Assets.
The
“Acquired
Assets”
shall
consist of the following assets, properties and contractual rights of
Seller:
3
(i) Software.
All of
Seller’s copyright rights in and to the computer software and programs listed in
Schedule
2(b)(i)
attached
hereto (including object and source code, in machine readable and listing form),
and all documentation (including internal documentation, documentation made
available to customers, and training materials), flowcharts, source code notes,
software tools, compilers, test routines and information related thereto, in
whatever form, and all revisions, modifications, upgrades, updates,
enhancements, release levels and versions of the foregoing (collectively, the
“Software”),
including without limitation all rights to produce, create, market and sell
derivative works and modifications of the Software.
(ii) Online
Properties.
The
Internet websites maintained by Seller for the Business Line, the homepage
for
which is located at xxx.XxxXxxxXxxx.xxx, and all content, design concepts,
code
(php, html, css, javascript and sql), text, graphics, images, data, video,
audio
(including without limitation music used in time relation with text, images,
or
video), URLs, navigational elements, links, pointers, technology and software
related thereto, including any modifications, upgrades, updates, enhancements
and related information or documentation (collectively, the “Online
Properties”).
(iii) Inventories.
All
inventories related to the Business Line as of the Closing Date, including
without limitation all expendables and consumables and all advertising material,
marketing material, copy, camera-ready art, trade show booth set-ups, displays
and other materials and supplies to be used or consumed in connection with
the
operation of the Business Line (collectively, the “Inventories”).
(iv) Proprietary
Rights.
All
patents, patent applications, copyrights, trade secrets, ideas, know-how, domain
names, metatags, trademarks, service marks, trade names, and other proprietary
rights based, in whole or in part, or included in, covering or related to the
Business Line or any portion thereof (collectively, the “Proprietary
Rights”),
including without limitation all of Seller’s copyright rights and other
Proprietary Rights in and to the Software and the Online
Properties.
(v) Trade
Names.
The
name “Membership Plus” and all variations or derivatives thereof, including all
trademarks, service marks, trade names or logos, together with any goodwill
associated therewith.
(vi) Records.
All
designs, drawings, procedures (including design, manufacturing, test and
maintenance procedures), records, specifications, technical data, inventory
records, customer and supplier lists and records (including all prospective
customer and leads lists), pricing and cost information, and business and
marketing plans and proposals, in whatever form, related to, useful, utilizable
or necessary in connection with the operation of the Business Line.
(vii) Accounts
Receivable.
All
billed and unbilled notes receivable, accounts receivable and other receivables
or rights to payments due to Seller in connection with the Business Line
existing as of the Closing Date (collectively, the “Accounts
Receivable”),
including without limitation those Accounts Receivable set forth on Schedule
3(q)
hereto.
4
(viii) Assigned
Contracts.
Subject
to Section 2(d) hereof, all of the rights of Seller arising after the Closing
Date under the distribution agreements, license agreements, and other agreements
set forth on Schedule
2(b)(viii)
hereto
(collectively, the “Assigned
Contracts”).
(ix) Other.
All
other assets of Seller exclusively used in or related to the Business
Line.
(c) Liabilities.
(i) Assumed
Liabilities.
Buyer
shall assume and pay or perform when due all obligations of Seller arising
after
the Closing Date under the Assigned Contracts (collectively, the “Assumed
Liabilities”),
which
obligations arise in accordance with the terms of such Assigned Contracts after
the Closing Date, except to the extent any such obligations relate to a default
thereunder by Seller, or an event which with notice or lapse of time or both
would constitute a default thereunder by Seller, occurring on or prior to the
Closing Date.
(ii) Retained
Liabilities.
Except
for the Assumed Liabilities, Buyer shall not assume and Seller shall retain
all
liabilities or obligations directly or indirectly arising out of or related
to
the Acquired Assets or the operation of the Business Line on or prior to the
Closing Date, whether such liabilities or obligations are known or unknown,
disclosed or undisclosed, matured or unmatured, accrued, absolute or contingent
(collectively, the “Retained
Liabilities”),
including without limitation: (A) liabilities and obligations for Taxes of
any
kind, including without limitation Taxes related to or arising solely from
the
transfers contemplated hereby (which transfer or sales taxes shall be the sole
responsibility of Seller); (B) liabilities and obligations for damage or injury
to person or property; (C) liabilities and obligations for or otherwise arising
out of sales of the Software or services related thereto or grants of licenses
by Seller on or prior to the Closing Date; and (D) liabilities and obligations
for payables incurred or otherwise related to the Acquired Assets or the
operation of the Business Line on or prior to the Closing Date. Without limiting
the foregoing, Buyer shall not assume or become liable for any obligations
or
liabilities of Seller not specifically described in Section
2(c)(i)
above
and specifically included in the Assumed Liabilities. Notwithstanding anything
herein to the contrary, Seller shall pay or perform all Retained Liabilities
no
later than when they become due and payable or are to be performed.
(d) Assigned
Contracts.
5
(i) The
parties acknowledge that the Software is sold or distributed by Seller pursuant
to the terms of certain distribution agreements and consignment agreements
between Seller and third party retailers (collectively, the “Distribution
Agreements”),
including but not limited to those distribution agreements and consignment
agreements set forth on Schedule
3(l)
hereto.
The parties have agreed that the Distribution Agreements will not be assigned
to
Buyer at Closing; provided, however, that (A) Buyer shall be entitled to receive
all benefits relating to the Software under such Distribution Agreements,
including but not limited to all payments due to Seller for the sale or
distribution of the Software thereunder, (B) Seller shall be responsible for
performing all obligations of Seller relating to the Software under such
Distribution Agreement, during the term of the Consulting Services Agreement
between Seller and Buyer, and (C) upon the expiration or earlier termination
of
the Consulting Services Agreement, Seller shall use commercially reasonable
efforts and shall cooperate with Buyer in entering into new distribution or
consignment agreements with such third party retailers, designed to provide
Buyer the benefits provided to Seller under such Distribution
Agreements.
(ii) Notwithstanding
anything herein to the contrary, the transfer of the Assigned Contracts shall
be
by assignment only, and nothing in this Agreement shall be construed as an
attempt to agree to assign any rights thereunder or under any other Acquired
Asset that by law or agreement is not assignable without the consent of the
other party or parties thereto or of any Governmental Authority, as the case
may
be, unless such consent shall be given. If and to the extent the assignment
of
any Assigned Contract requires the consent of another Person, then: (A) such
Assigned Contract shall not be deemed assigned and shall constitute an assumed
liability of Buyer until such consent is obtained; (B) the Parties shall
use
commercially reasonable efforts and shall cooperate with each other in seeking
such consent or entering into reasonable arrangements, designed to provide
Buyer
the benefits thereunder;
and (C)
Buyer shall be obligated to perform and discharge the obligations of Seller
arising after the Closing Date under any such Assigned Contract only after
such
consent is obtained.
(e) Purchase
Price.
In
consideration of the sale, transfer, conveyance, assignment and delivery of
the
Acquired Assets, and in reliance upon the representations and warranties made
herein by Seller, Buyer shall pay to Seller the sum of One Million Six Hundred
Seventy-Five Thousand and 00/100 ($1,675,000.00) Dollars (the “Purchase
Price”).
The
Purchase Price shall be payable by Buyer to Seller in cash or by wire transfer
or delivery of other immediately available funds at the Closing.
(f) The
Closing.
The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall
take place simultaneously with the execution and delivery of this Agreement
at
the offices of Seller and Buyer with deliveries by facsimile or wire transfer.
The hour and date of the Closing are referred to herein as the “Closing
Date”.
The
parties agree and intend that the Closing shall be effective as of 11:59 p.m.
on
the Closing Date.
(g) Deliveries
at the Closing.
At or
before the Closing: (i) Seller will deliver to Buyer the various certificates,
instruments, and documents referred to in Section
6(a)
below;
(ii) Buyer will deliver to Seller the various certificates, instruments, and
documents referred to in Section
6(b)
below;
(iii) Seller will execute, acknowledge (if appropriate), and deliver to Buyer
(A) assignments (including Proprietary Rights transfer documents) in the forms
attached hereto as Exhibit
A
and
Exhibit
C,
and (B)
such other instruments of sale, transfer, conveyance, and assignment as Buyer
and its counsel may reasonably request; (iv) Buyer will execute, acknowledge
(if
appropriate), and deliver to Seller (A) an assumption in the form attached
hereto as Exhibit
C
and (B)
such other instruments of assumption as Seller and its counsel reasonably may
request; and (v) Buyer will deliver to Seller the Purchase Price specified
in
Section
2(e)
above.
6
(h) Further
Assurances.
If, at
any time following the Closing Date, Buyer shall consider or be advised that
any
deeds, bills of sale, assignments or assurances or any other acts or things
are
necessary, desirable or proper (i) to vest, perfect or confirm, of record or
otherwise, in Buyer its right, title and interest in, to or under any of the
Acquired Assets, or (ii) otherwise to carry out the purposes of this Agreement,
Seller shall execute and deliver all such deeds, bills of sale, assignments
and
assurances and shall do all such other acts and things as may be necessary,
desirable or proper to vest, perfect or confirm Buyer’s right, title and
interest in, to and under any of the Acquired Assets and otherwise to carry
out
the purposes of this Agreement.
3. REPRESENTATIONS
AND WARRANTIES OF THE SELLER.
Seller
represents and warrants to Buyer that the statements contained in this
Section
3
are
correct and complete as of the Closing Date, except as set forth in the
disclosure schedules accompanying this Agreement and initialed by the Parties
(each and “Schedule”
and
collectively, the “Disclosure
Schedule”).
The
Disclosure Schedule is arranged in pages corresponding to the lettered and
numbered paragraphs contained in this Agreement.
(a) Organization
of Seller.
Seller
is a corporation duly organized, validly existing and in good standing under
the
laws of the jurisdiction of its incorporation and has full power and authority
to carry on its current business and to own, use and sell its assets and
properties, including the Acquired Assets. Seller is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each
state or other jurisdiction in which the conduct of the Business Line requires
such qualification, except where the failure to be so qualified is not
reasonably anticipated to have a Material Adverse Effect.
(b) Authorization
of Transaction.
Seller
has full power and authority (including full corporate power and authority)
to
execute and deliver this Agreement and to perform its obligations hereunder.
Without limiting the generality of the foregoing, the Board of Directors of
Seller and, to the extent required by applicable law, Seller’s shareholders have
duly authorized the execution, delivery, and performance of this Agreement
by
Seller. This Agreement constitutes the valid and legally binding obligation
of
Seller, enforceable in accordance with its terms and conditions.
(c) Noncontravention.
Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any Governmental Authority to which Seller is subject or any
provision of the charter or bylaws of Seller or (ii) except as set forth on
Schedule
3(c),
conflict with, result in a breach of, constitute a default under, result in
the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice or consent under any agreement, contract,
lease, license, instrument, or other arrangement to which Seller is a party
or
by which it is bound or to which any of its assets is subject (or result in
the
imposition of any Lien upon any of its assets). Except as set forth on
Schedule
3(c),
Seller
does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Authority in order
for
the Parties to consummate the transactions contemplated by this
Agreement.
7
(d) Brokers'
Fees.
Seller
has no Liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this Agreement
for which Buyer could become liable or obligated.
(e) Title
to Acquired Assets.
Except
as set forth on Schedule
3(e),
Seller
has good and valid title to all of the Acquired Assets; owns the Acquired Assets
free and clear of any and all Liens; and is conveying good and valid title
to
the Acquired Assets to Buyer free and clear of any and all Liens. No portion
of
the Acquired Assets is subject to any outstanding injunction, judgment, order,
decree, ruling or charge, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or, to the
Knowledge of Seller, is threatened which challenges the legality, validity,
enforceability, use, or ownership of any portion of the Acquired Assets. Except
as set forth on Schedule
3(e),
all of
the tangible Acquired Assets being acquired by Buyer on the Closing Date are
in
the possession and control of Seller. Seller is the sole and exclusive owner
of
the Acquired Assets, and has the sole and exclusive right to use, license,
sublicense, assign or sell the Acquired Assets without liability to, or consent
of, any Person. Except pursuant to this Agreement, Seller is not a party to
any
contract or obligation whereby an absolute or contingent right to purchase,
obtain or acquire any rights in any of the Acquired Assets has been granted
to
any Person.
(f) Software.
Except
as set forth on Schedule
3(f),
there
are no known errors, malfunctions or defects in the Software. Seller is not
aware of any unauthorized use of the Software or any portion thereof by any
Person. All modifications, improvements and other derivative works to or from
the Software created by or on behalf of Seller have been created solely by
employees of Seller who are under an obligation to assign all right, title
and
interest therein to Seller. Except for licenses granted in the Ordinary Course
of Business to purchasers or licensees of the Software, no rights or licenses,
express or implied, have been granted to any Person under, in or to the Software
or any portion thereof.
(g) Online
Properties.
There
are no known errors, malfunctions or defects in the Online Properties. Seller
is
not aware of any unauthorized use of the Online Properties or any portion
thereof by any Person. All modifications, improvements and other derivative
works to or from the Online Properties created by or on behalf of Seller have
been created solely by employees of Seller who are under an obligation to assign
all right, title and interest therein to Seller. Except for licenses granted
in
the Ordinary Course of Business to end users of the Online Properties, no rights
or licenses, express or implied, have been granted to any Person under, in
or to
the Online Properties or any portion thereof.
(h) Inventories.
Schedule
3(h)
contains
a complete and correct list of all Inventories as of the Closing Date. The
Inventories consist of materials and supplies, manufactured and purchased parts,
goods in process, and finished goods, all of which are of a quality and quantity
usable or salable in the Ordinary Course of Business of Seller, are currently
used by Seller in the Ordinary Course of Business, and are merchantable and
fit
for the purpose for which such items were procured or manufactured.
8
(i) Proprietary
Rights.
Schedule
3(i)
contains
a complete and correct list of all trade names, domain names, trademarks,
service marks, service names, logos, brand names, registered copyrights and
patents, and to the extent applicable any registrations and applications
therefor, used by Seller in connection with or otherwise included in, covering
or related to the Business Line. Seller has delivered to Buyer complete and
correct copies of all such trademarks, service marks, patents, and related
registrations and applications and has made available to Buyer complete and
correct copies of all other written documentation evidencing ownership and
prosecution (if applicable) of each such item. The Proprietary Rights are in
full force and effect and there are no Liens, proceedings or causes of action
that in any way affect the validity or enforceability of such Proprietary
Rights. Except for licenses granted in the Ordinary Course of Business to
purchasers, licensees or end users of the Software and Online Properties, no
rights or licenses, express or implied, have been granted to any Person under,
in or to the Proprietary Rights or any portion thereof.
(j) Non-Infringement.
The
Acquired Assets, in whole or in part, do not violate or infringe any patents,
copyrights, trademarks, service marks, trade names, trade dress, rights of
privacy or publicity, moral rights, rights of attribution or integrity or any
other intellectual property or proprietary rights of any Person (collectively,
“Third
Party Intellectual Property Rights”)
and no
rights or licenses are required from any Person to exercise any rights with
respect to the Acquired Assets or any portion thereof. Seller has not interfered
with, infringed upon, misappropriated, or otherwise come into conflict with
any
Third Party Intellectual Property Rights, and none of Seller or its officers,
directors, shareholders or employees has ever received any charge, complaint,
claim, demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that Seller must license
or
refrain from using any Third Party Intellectual Property Rights). To the
Knowledge of Seller, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with the Acquired Assets or
any
portion thereof.
(k) Legal
Compliance.
Except
as would not, individually or in the aggregate, have a Material Adverse Effect
on Seller, Seller has complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings,
and
charges thereunder) of Governmental Authorities, and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against Seller alleging any failure so to
comply.
(l) Contracts.
Schedule
3(l)
contains
a complete and correct list of all written or oral contracts, agreements or
commitments that in any way relate to the Acquired Assets. Seller has delivered
to Buyer a correct and complete copy of each written agreement listed in
Schedule
3(l),
together with a written summary setting forth the terms and conditions of each
oral agreement referred to in Schedule
3(l).
With
respect to each such agreement: (i) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (ii) the agreement will continue
to
be legal, valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the transactions contemplated hereby; (iii)
no party is in breach or default, and no event has occurred which with notice
or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (iv) no party has
repudiated any provision of the agreement.
9
(m) Litigation.
Schedule
3(m)
sets
forth each instance in which Seller (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a party,
or to
the Knowledge of Seller is threatened to be made a party, to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator. None of the actions, suits, proceedings,
hearings, and investigations set forth in Schedule
3(m)
could
result in any Material Adverse Effect on Seller or any of the Acquired
Assets.
(n) Product
Warranty.
Each
product manufactured, sold, licensed, leased, or delivered by Seller has been
in
conformity with all applicable contractual commitments and all express and
implied warranties, and Seller has no Liability (and there is no Basis for
any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against it giving rise to any Liability) for
replacement or repair thereof or other damages in connection therewith. No
product manufactured, sold, licensed, leased, or delivered by Seller is subject
to any guaranty, warranty, or other indemnity beyond the applicable standard
terms and conditions of sale or license. Exhibit
D
includes
correct and complete copies of the standard terms and conditions of sale,
license, lease, maintenance and support agreements relating to the Software
or
the Online Properties (containing applicable guaranty, warranty, and indemnity
provisions). The Software and the Online Properties have been licensed for
use
by third parties only in accordance with such standard terms and conditions.
(o) Product
Liability.
Seller
has no Liability (and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
it giving rise to any Liability) arising out of any injury to individuals or
property as a result of the ownership, possession, or use of the Software or
the
Online Properties.
(p) Customer
Base.
There
are at least 27,000 churches, “para-church” organizations and ministries, and
non-profit entities that, in the aggregate, are currently registered Membership
Plus users. Schedule
3(p)
contains
a complete and accurate list of all such registered Membership Plus users as
of
the Closing Date.
(q) Accounts
Receivable.
All
Accounts Receivable represent valid obligations arising from sales actually
made
or services actually performed by Seller in the Ordinary Course of Business.
Such Accounts Receivable are or will be as of the Closing Date current and
collectible consistent with past practice. There is no contest, claim, defense
or right of setoff, other than returns in the ordinary course of business of
Seller, relating to the amount or validity of such Account Receivable.
Schedule
3(q)
contains
a complete and accurate list of all Accounts Receivable as of the Closing Date,
which list sets forth the name and address of each customer and the amount
and
aging of each Account Receivable.
10
(r) Disclosure.
The
representations and warranties contained in this Section
3
do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in
this
Section
3
not
misleading.
4. REPRESENTATIONS
AND WARRANTIES OF THE BUYER.
Buyer
represents and warrants to Seller that the statements contained in this
Section
4
are
correct and complete as of the Closing Date.
(a) Organization
of Buyer.
Buyer
is a corporation duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation and has full power and
authority to carry on its current business and to own, use and sell its assets
and properties.
(b) Authorization
of Transaction.
Buyer
has full power and authority (including full corporate power and authority)
to
execute and deliver this Agreement and to perform its obligations hereunder.
Without limiting the generality of the foregoing, the Board of Directors of
Buyer has duly authorized the execution, delivery, and performance of this
Agreement by Buyer. This Agreement constitutes the valid and legally binding
obligation of Buyer, enforceable in accordance with its terms and
conditions.
(c) Noncontravention.
Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any Governmental Authority to which Buyer is subject or any
provision of its charter or bylaws or (ii) conflict with, result in a breach
of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Buyer is a party or by which it is bound or to which any of its assets
is subject. Buyer does not need to give any notice to, make any filing with,
or
obtain any authorization, consent, or approval of any Governmental Authority
in
order for the Parties to consummate the transactions contemplated by this
Agreement.
(d) Brokers’
Fees.
Buyer
has no Liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this Agreement
for which Seller could become liable or obligated.
5. INTENTIONALLY
DELETED.
6. ADDITIONAL
CLOSING DOCUMENTS OR ACTIONS.
(a) Additional
Closing Documents or Actions of Seller.
At or
before the Closing:
(i) Buyer
shall have received from counsel to Seller opinions in form and substance as
set
forth in Exhibit
B-1
and
Exhibit
B-2
attached
hereto, addressed to Buyer, and dated as of the Closing Date;
11
(ii) Buyer
shall have received counterparts of the Partial Assignment of License Agreement
among Seller, Buyer and Riverdeep, Inc. (the “Riverdeep
Assignment”)
substantially in the form attached hereto as Exhibit
E
and the
Agreement between Seller and Riverdeep, Inc. (the “Riverdeep
Agreement”)
substantially in the form attached hereto as Exhibit
F,
in each
case duly executed by Seller and Riverdeep, Inc.;
(iii) Buyer
shall have received counterparts of the Contract for Consulting Services (the
“Consulting
Services Agreement”)
substantially in the form attached hereto as Exhibit
G,
duly
executed by Seller; and
(iv) Seller
shall execute and deliver such other documents as are required pursuant to
this
Agreement or as may reasonably be requested by Buyer.
(b) Additional
Closing Documents or Actions of Buyer.
At or
before the Closing:
(i) Seller
shall have received counterparts of the Consulting Services Agreement, duly
executed by Buyer;
(ii) Seller
shall have received counterparts of the Riverdeep Assignment, duly executed
by
Buyer; and
(iii) Buyer
shall execute and deliver such other documents as are required pursuant to
this
Agreement or as may reasonably be requested by Seller.
7. POST-CLOSING
COVENANTS.
(a) Except
as
provided in the Consulting Services Agreement or as necessary to fulfill its
obligations thereunder, from and after the Closing, Seller
shall cease utilizing the name “Membership Plus”, or any variations or
derivatives thereof, in connection with any of its continuing business
operations or initiatives.
(b). For
purposes of any federal or state tax reporting associated with the transactions
contemplated by this Agreement, Buyer and Seller agree that the Purchase Price
shall be allocated among the Acquired Assets in accordance with the purchase
price allocation schedule annexed hereto and made a part hereof (the
“Purchase
Price Allocation Schedule”).
Said
allocation is intended by Buyer and Seller to comply with Section 1060 of the
Code and any Treasury Regulations issued thereunder, and Buyer and Seller shall
file Form 8594 with their respective federal income tax returns in a manner
consistent with said allocation.
8. INDEMNIFICATION.
(a) Indemnification
by Seller.
Up to a
maximum amount equal to the Purchase Price, Seller shall indemnify, defend
and
hold harmless Buyer and its officers and directors from, against, and with
respect to any and all losses, damages, claims, obligations, liabilities, costs
and expenses (including, without limitation, reasonable attorneys’ fees and
costs and expenses incurred in investigating, preparing, defending against
or
prosecuting any litigation, claim, proceeding or demand) of any kind or
character (each a “Loss”
and
collectively, the “Losses”)
arising out of or in connection with any of the following:
12
(i) Any
material breach of any of the representations or warranties of Seller contained
in this Agreement;
(ii) Any
material failure by Seller to perform or observe any covenant, agreement or
condition to be performed or observed by it pursuant to this
Agreement;
(iii) Any
and
all Retained Liabilities or other liabilities and obligations of Seller, except
for the Assumed Liabilities;
or
(iv) Seller’s
ownership and operation of the Acquired Assets and the Business Line on or
prior
to the Closing Date, including without limitation any and all claims for
products, service or professional liability against Seller arising out of sales
of the Software or services related thereto or grants of licenses by Seller
on
or prior to the Closing Date.
(b) Indemnification
by Buyer.
Buyer
shall indemnify, defend and hold harmless Seller and its officers and directors
from, against and with respect to any Losses arising out of or in connection
with any of the following:
(i) Any
material breach of any of the representations and warranties of Buyer contained
in this Agreement;
(ii) Any
material failure by Buyer to perform or observe, any covenant, agreement or
condition to be performed or observed by it pursuant to this
Agreement;
(iii) All
obligations and liabilities arising after the Closing Date attributable to
the
Assumed Liabilities; or
(iv) Buyer’s
ownership and operation of the Acquired Assets after the Closing Date, including
without limitation any and all claims for products, service or professional
liability against Buyer arising out of sales of the Software or services related
thereto or grants of licenses by Buyer after the Closing Date.
(c) Notice
of Claim.
Any
party seeking to be indemnified hereunder (the “Indemnified
Party”)
shall,
within thirty (30) days following discovery of the matters giving rise to a
Loss, notify the party from whom indemnity is sought (the “Indemnity
Obligor”)
in
writing of any claim for recovery, specifying in reasonable detail the nature
of
the Loss and the amount of the liability estimated to arise therefrom; provided,
however, that no single claim shall be made hereunder for an amount less than
Twenty-Five Thousand and No/100ths Dollars ($25,000.00). If the Indemnified
Party does not so notify the Indemnity Obligor within said thirty (30) days,
such claim shall be barred, and the Indemnity Obligor shall have no obligation
with respect thereto. The Indemnified Party shall provide to the Indemnity
Obligor as promptly as practicable thereafter all information and documentation
requested by the Indemnity Obligor to verify the claim asserted.
13
(d) Defense.
If the
facts pertaining to a Loss arise out of the claim of any third party, or if
there is any claim against a third party available by virtue of the
circumstances of the Loss, the Indemnity Obligor may, by giving written notice
to the Indemnified Party within thirty (30) days following its receipt of the
notice of such claim, elect to assume the defense or the prosecution thereof,
including the employment of counsel or accountants at its cost and expense;
provided, however, that during the interim the Indemnified Party shall use
its
best efforts to take all action (not including settlement) reasonably necessary
to protect against further damage or loss with respect to the Loss. The
Indemnified Party shall have the right to employ counsel separate from counsel
employed by the Indemnity Obligor in any such action and to participate therein,
but the fees and expenses of such counsel shall be at the Indemnified Party’s
own expense. Whether or not the Indemnity Obligor chooses so to defend or
prosecute such claim, all the parties hereto shall cooperate in the defense
or
prosecution thereof. In the event of payment by the Indemnity Obligor to the
Indemnified Party in connection with any Loss arising out of a third party
claim, the Indemnity Obligor shall be subrogated to and shall stand in the
place
of the Indemnified Party with respect to such Indemnified Matter. The
Indemnified Party shall cooperate with the Indemnity Obligor in prosecuting
any
subrogated claim.
(e) Time
for Claims.
All of
the representations and warranties of the Parties contained in this Agreement
shall survive the Closing. Except as otherwise provided herein, action on any
claim asserted with respect to the items enumerated in Sections
8(a)
or
8(b)
must be
commenced within four (4) years after the Closing Date.
(f) Reduction
by Insurance Proceeds.
The
amount payable by an Indemnity Obligor to an Indemnified Party with respect
to a
Loss shall be reduced by the amount of any insurance proceeds received by the
Indemnified Party with respect to the Loss, and each of the parties hereby
agrees to use its best efforts to collect any and all insurance proceeds to
which it may be entitled in respect of any Loss.
9. MISCELLANEOUS.
(a) Press
Releases and Public Announcements.
Any
Party may make any public disclosure it believes in good faith is required
by
applicable law, in which case the disclosing Party will use its best efforts
to
advise the other Party prior to making the disclosure.
(b) No
Third-Party Beneficiaries.
This
Agreement shall not confer any rights or remedies upon any Person other than
the
Parties and their respective successors and permitted assigns.
(c) Entire
Agreement.
This
Agreement (including the documents referred to herein) constitutes the entire
agreement between the Parties and supersedes any prior understandings,
agreements, or representations by or between the Parties, written or oral,
to
the extent they related in any way to the subject matter hereof.
14
(d) Succession
and Assignment.
This
Agreement shall be binding upon and inure to the benefit of the Parties named
herein and their respective successors and permitted assigns. No Party may
assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Party.
(e) Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together will constitute one and the same
instrument.
(f) Headings.
The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.
(g) Notices.
All
notices, requests, demands, claims, and other communications hereunder will
be
in writing. Any notice, request, demand, claim, or other communication hereunder
shall be deemed duly given if (and then two business days after) it is sent
by
registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If
to Seller:
|
Copy
to:
|
|||
Xxxxxx
Xxxxxx
|
Xxxxxxx
X. Xxxxxxxx
|
|||
Xxxxxx.xxx,
Inc.
|
X.X.
Xxxxxxxx, PLLC
|
|||
000
Xxxxx 000xx
Xxxxxx
|
000
Xxxx 00xx
Xxxxxx, Xxxxx 0000
|
|||
Xxxxx,
XX 00000
|
Xxx
Xxxx, XX 00000
|
|||
P:
(000)000-0000
|
P:
(000)000-0000
|
|||
F:
(000)000-0000
|
F:
(000)000-0000
|
|||
If
to Buyer:
|
Copies
to:
|
|||
Xxx
Xxxxxxxx
|
J.
Xxxxx Xxxxxx
|
|||
ACS
Technologies Group, Inc.
|
ACS
Technologies Group, Inc.
|
|||
000
Xxxxxxxxx Xxxxx
|
000
Xxxxxxxxx Xxxxx
|
|||
Xxxxxxxx,
XX 00000
|
Xxxxxxxx,
XX 00000
|
|||
P:
(000)000-0000
|
P:
(000)000-0000
|
|||
F:
(000)000-0000
|
F:
(000)000-0000
|
|||
Xxxxxx
X. Xxxxxxx III
|
||||
Xxxxxxxxxxx
Xxxxxx Xxxx & Xxxx, P.C.
|
||||
000
X. XxXxx Xxxxxx, Xxxxx 000
|
||||
Xxxxxxxxxx,
XX 00000
|
||||
P:
(000)000-0000
|
||||
F:
(000)000-0000
|
Any
Party
may send any notice, request, demand, claim, or other communication hereunder
to
the intended recipient at the address set forth above using any other means
(including personal delivery, expedited courier, messenger service, telecopy,
telex, ordinary mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless
and
until it actually is received by the intended recipient. Any Party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Party notice
in
the manner herein set forth.
15
(h) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of South Carolina without giving effect to any choice or
conflict of law provision or rule (whether of the State of South Carolina or
any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of South Carolina.
(i) Amendments
and Waivers.
No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by Buyer and Seller. No waiver by any Party
of
any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability.
Any term
or provision of this Agreement that is invalid or unenforceable in any situation
in any jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or enforceability of
the
offending term or provision in any other situation or in any other
jurisdiction.
(k) Expenses.
Each
Party will bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby.
(l) Construction.
The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any of the provisions of this Agreement.
Any reference to any federal, state, local, or foreign statute or law shall
be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. The word “including” shall mean including
without limitation. Nothing in the Disclosure Schedule shall be deemed adequate
to disclose an exception to a representation or warranty made herein unless
the
Disclosure Schedule identifies the exception with reasonable particularity
and
describes the relevant facts in reasonable detail. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be deemed adequate to disclose an exception
to
a representation or warranty made herein (unless the representation or warranty
has to do with the existence of the document or other item itself). The Parties
intend that each representation, warranty, and covenant contained herein shall
have independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or
covenant.
16
(m) Incorporation
of Exhibits and Schedules.
The
Exhibits and Schedules identified in this Agreement are incorporated herein
by
reference and made a part hereof.
(n) Submission
to Jurisdiction.
Each of
the Parties submits to the exclusive jurisdiction of any state or federal court
sitting in Xxxxxxxx County, South Carolina, in any action or proceeding arising
out of or relating to this Agreement, except as otherwise expressly provided
in
Section
9(o)
hereof,
and agrees that all claims in respect of the action or proceeding may be heard
and determined in any such court. Each Party also agrees not to bring any action
or proceeding arising out of or relating to this Agreement in any other court.
Each of the Parties waives any defense of inconvenient forum to the maintenance
of any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto. Any
Party may make service on the other Party by sending or delivering a copy of
the
process to the Party to be served at the address and in the manner provided
for
the giving of notices in Section
9(g)
above.
Nothing in this Section
9(n),
however, shall affect the right of any Party to serve legal process in any
other
manner permitted by law or in equity. Each Party agrees that a final judgment
in
any action or proceeding so brought shall be conclusive and may be enforced
by
suit on the judgment or in any other manner provided by law or in
equity.
(o) Arbitration.
The
Parties agree that all disputes arising out of or in connection with this
Agreement shall be settled by arbitration in accordance with the provisions
of
the Uniform Arbitration Act of S.C. Code Sections 15-48-10 through 00-00-000,
and judgment upon the award rendered by the arbitrator(s) shall be binding
and
may be entered in any court having jurisdiction.
[SIGNATURE
PAGE FOLLOWS]
17
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement on as of the
date first above written.
ACS
TECHNOLOGIES GROUP, INC.
By:
/s/ J. Xxxxx Xxxxxx
Name:
J.
Xxxxx Xxxxxx
Title:
COO/CFO
XXXXXX.XXX,
INC.
By:
/s/ Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
CEO
18