ASSET PURCHASE AND
ASSIGNMENT AGREEMENT
ASSET PURCHASE AND ASSIGNMENT AGREEMENT (this "Agreement"), dated as
of the 28th day of September, 1999, by and among XxxXxxx.xxx, Inc. ("EyeCity"),
a Delaware corporation, Impact Eyewear, LLC ("Impact"), a New Jersey limited
liability company, and Xxxxxx Xxxxxxx ("Xxxxxxx"), an individual residing at 00
Xxxxxxxx Xxxxx, Xxxx Xxxxxx, Xxx Xxxxxx 00000.
1. (a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, Impact and Xxxxxxx do hereby
irrevocably, absolutely and permanently assign, transfer, convey and deliver to
EyeCity, its successors and assigns, all of Impact's and Xxxxxxx'x right, title
and interest in and to that certain Merchandise License Agreement between Impact
and Yahoo, Inc. ("Yahoo"), dated January 15, 1999 (the "License"), a copy of
which is attached hereto as Schedule A, as well as any and all other assets of
Impact or Xxxxxxx used, usable or useful in connection with or otherwise related
to the License and/or the conduct of Impact's business as presently conducted,
including without limitation the assets described in Exhibit 1 hereto
(collectively the "Assets") free and clear of all mortgages, charges, pledges,
liens, security interests, claims, encumbrances or restrictions, of any kind or
nature ("Liens"), in consideration of the aggregate purchase price (the
"Purchase Price") of (i) $120,000 in cash and (ii) 166,667 shares of EyeCity
Common Stock, par value $0.001 per share (the "EyeCity Common Stock"), (the
"Purchase Shares"). Concurrently with the execution hereof, EyeCity has
delivered $70,000 of the cash portion of the Purchase Price to Impact, and the
balance of the Purchase Price to the Escrow Agent pursuant to the Escrow
Agreement, attached hereto as Exhibit 2.
(b) Notwithstanding the generality of the foregoing, EyeCity shall
not assume, and shall have absolutely no liability or obligation for or with
respect to, any liabilities of Impact or Xxxxxxx, whether known or unknown,
direct or indirect, liquidated or contingent, with respect to the License, the
Assets or otherwise (collectively, "Liabilities"), except for those obligations
arising after the date hereof in connection with EyeCity's exercise of rights
under the License.
2. Simultaneously with the execution of this Agreement, (i) Impact and
EyeCity have executed and delivered the Escrow Agreement, (which has also been
executed by Rosenman & Colin LLP, as escrow agent) and an Employment Agreement,
a copy of which is attached hereto as Exhibit 3, and (ii) Impact has delivered
those certain letters from and signed by Yahoo, Inc., dated May 21, 1999 and
September 27, 1999 confirming its agreement to the assignment of the License to
EyeCity pursuant hereto, copies of which is attached hereto as Exhibit 4.1 and
4.2, respectively.
3. Impact hereby constitutes and appoints EyeCity the true and lawful
attorney of Impact with full power of substitution, in the name of Impact or in
the name of EyeCity, for the benefit of EyeCity and at no cost, expense or
liability to Impact, subject to Section 8(a) hereof, (a) to collect, assert or
enforce any claim, right or title of any kind in or to the License and/or the
Assets, to institute and prosecute all actions, suits and proceedings which
EyeCity may reasonably deem proper in order to collect, assert or enforce any
such claim, right or title, and to
do all such acts and things in relation thereto as EyeCity shall reasonably deem
advisable and (b) to take all action which EyeCity may reasonably deem proper in
order to provide for EyeCity the benefits of or under the License and/or in
respect of the Assets where any required consent of a third party to the
assignment thereof to EyeCity shall not have been obtained. Impact acknowledges
that such powers are coupled with an interest and shall not be revocable by it
in any manner or for any reason, and that EyeCity shall be entitled to retain
for its own account any amounts collected pursuant to such powers, including any
amounts payable as interest in respect thereof.
4. Impact and Xxxxxxx, jointly and severally, represent and warrant to
EyeCity that:
(a) Impact is a limited liability company, duly organized, validly
existing and in good standing under the laws of the State of New Jersey on the
date hereof and has the power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being conducted.
Impact and Xxxxxxx each have the power and authority to execute and deliver this
Agreement and all other documents hereby contemplated to be executed by Impact
and Xxxxxxx, to consummate the transactions hereby and thereby contemplated and
to take all other actions required to be taken by them pursuant to the
provisions hereof and thereof. The execution, delivery and performance of this
Agreement and all other documents hereby contemplated to be executed by Impact
and the Xxxxxxx has been, and the consummation by Impact of the transactions
hereby and thereby contemplated has been, duly authorized by all necessary
action, member or otherwise, of Impact and Xxxxxxx. Xxxxxxx, Xxxxxxxx Xxxxxxx,
Xxxxxx X. Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx and Xxxxxxxxx
Xxxxxxx comprise all of the members of Impact and are the owners of all the
issued and outstanding membership interests of Impact. There are no options,
warrants or other convertible securities of Impact exercisable for interests of
Impact, and, other than its Operating Agreement, no voting or other member
agreement with respect to Impact. This Agreement and all other documents hereby
contemplated to be executed by Impact and/or Xxxxxxx constitute the legal, valid
and binding obligations of Impact and/or Xxxxxxx, as applicable, enforceable
against Impact and/or Xxxxxxx in accordance with their respective terms.
(b) The execution and delivery by Impact and Xxxxxxx of this Agreement or
any other documents hereby contemplated and the consummation of the transactions
hereby and thereby contemplated by Impact and Xxxxxxx shall not (i) constitute a
default under or a violation or breach of, or result in the acceleration of any
obligation under, any provision of any contract, mortgage or other instrument to
which Impact is a party or by which any of its assets may be affected or
secured, (ii) violate any statute, law, treaty, rule, code, ordinance,
regulation, policy, permit, certificate, order, judgment, decree, injunction,
writ, order or like action of any federal, state, local or foreign governmental
authority or regulatory body, any subdivision, agency, commission or authority
thereof (including, without limitation, environmental protection, planning and
zoning), or any quasi-governmental or private body exercising any regulatory
authority thereunder and any person directly or indirectly owned by and subject
to the control of any of the foregoing, or any court, arbitrator or other
judicial or quasi-judicial tribunal (each, a "Governmental Rule") affecting
Impact or any of its Assets, (iii) result in the creation of any Lien on the
License or any of the assets or properties of Impact, or (iv) result in the
termination of any license, franchise, lease or permit to which Impact is a
party or by which it is bound. Impact has complied in all material respects with
all Governmental Rules applicable to the License and the Assets. Impact has
maintained in full force and effect all licenses, approvals,
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permits and consents for the lawful operation of the License and the Assets. To
the best of their knowledge, neither Impact nor Xxxxxxx is in violation of any
Governmental Rule applicable to the License and the Assets, and has not received
any notice of any such violation. No authorization, approval, order, license,
permit, franchise or consent, and no registration, declaration, notice or filing
by or with any domestic or foreign governmental agency, body or authority by
Impact is required in connection with the execution and delivery by Impact of
this Agreement and the consummation by Impact and Xxxxxxx of the transactions
hereby contemplated.
(c) Except for Liens (i) for any current taxes or assessments not yet
delinquent or (ii) created by statute of carriers, warehousemen, mechanics,
laborers and materialmen incurred in the ordinary course of business for sums
not yet due, Impact has good and marketable title, free and clear of all Liens,
to the License and the Assets. There are no options, agreements, limitations,
rights of first refusal or other arrangements with any third party with respect
to the License, the Assets or the transfer thereof.
(d) The License does not constitute all, substantially all or a
significant part of the assets of Impact.
(e) There are no claims, actions, suits, litigations, proceedings, audits,
controversies or investigations, pending or, to the knowledge of Impact or
Xxxxxxx, threatened against or affecting the License or the Assets, and Impact
has not been charged with or, to the knowledge of Impact or Xxxxxxx, threatened
with a charge of any violation of, and is not under investigation with respect
to a possible violation of, any provision of any Governmental Rule relating to
the License or the Assets.
(f) Impact (i) is not bound by or a party to any options, licenses, or
agreements of any kind with respect to the License or the Assets and (ii) has
not assigned, licensed or in any manner encumbered or impaired any rights in the
License or the Assets. To the best of Impact's and Xxxxxxx'x knowledge, the
License does not infringe or violate any personal, property, statutory or common
law or any other rights of any third parties (including, without limitation,
copyright, trademark and the rights of privacy and publicity), and no claim
alleging any such infringement or violation by Impact or Xxxxxxx or the License
has been received by Impact or Xxxxxxx. To the best of Impact and Xxxxxxx'x
knowledge, Yahoo, Inc. has not granted or licensed any of the rights contained
in the License to any party other than Impact. No royalties, honoraria or fees
are payable to and no consents or approvals are needed from any third persons or
entities other than Yahoo, Inc. in connection with the ownership, use or
exploitation of the License.
5. EyeCity represents and warrants to Impact and Xxxxxxx that:
(a) EyeCity is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power and
authority to own or lease all of its properties and assets and carry on its
business as it is now being conducted. EyeCity has the corporate power and
authority to execute and deliver this Agreement, and all other documents hereby
contemplated, to consummate the transactions hereby and thereby contemplated and
to take all other actions required to be taken by it pursuant to the provisions
hereof and thereof. The execution, delivery and performance of this Agreement
and all other documents hereby contemplated to be executed by EyeCity has been,
and the consummation by EyeCity of the transactions hereby and thereby
contemplated has been, duly authorized by any
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and all necessary corporate action of EyeCity. This Agreement and all other
documents hereby contemplated to be executed by EyeCity constitute the legal,
valid and binding obligations of EyeCity, enforceable against EyeCity in
accordance with their respective terms.
(b) Neither the execution and delivery of this Agreement or any other
documents hereby contemplated nor the consummation of the transactions hereby
and thereby contemplated shall (i) constitute any violation or breach of the
Certificate of Incorporation or By-laws of EyeCity, (ii) constitute a default
under or a violation or breach of, or result in acceleration of any obligation
under, any provision of any contract, lease, mortgage or other instrument to
which it is a party, or (iii) violate any judgment, order, writ, injunction,
decree, statute, rule or regulation affecting EyeCity or any of its assets.
(c) The EyeCity Common Stock to be issued pursuant to the provisions of
this Agreement will, upon such issuance, be duly authorized, legally and validly
issued, and fully paid and nonassessable.
6. (a) Each of Impact and Xxxxxxx covenants that until one year after the
expiration of the License, neither it, he nor any person, firm, company, entity
or corporation, anywhere in the world, directly or indirectly owned or
affiliated with or controlled by any of them, will encourage or solicit, either
directly or indirectly, Yahoo or any of its affiliates to grant or license any
of the non-exclusive rights contained in the License to any of the foregoing
persons, firms, companies, entities, corporations, affiliates or control persons
or to any third party. In the event of a breach, or threatened breach of the
provisions of this Section 6(a), in addition to any other remedies EyeCity may
have at law or in equity, EyeCity shall be entitled to an injunction or similar
remedy so as to enable it specifically to enforce such provisions, and neither
Impact nor Xxxxxxx shall plead in defense thereto that there would be an
adequate remedy at law, it being recognized and agreed that the injury and
damage resulting from such a breach would be impossible to measure monetarily.
(b) From and after the date hereof, Impact and Xxxxxxx shall, at any time
and from time to time, at their sole cost and expense, make, execute and
deliver, or cause to be made, executed and delivered, such assignments, deeds,
drafts, checks, stock certificates, returns, filings and other instruments,
agreements, consents and assurances and take or cause to be taken all such
actions as counsel for EyeCity may reasonably request for the effectual
consummation, confirmation and particularization of this Agreement and the
transactions hereby contemplated.
7. (a) Impact (i) represents and warrants to EyeCity that it is acquiring
all of the shares of EyeCity Common Stock to be issued to it pursuant to the
provisions of this Agreement for its own account and for the purposes of
investment and not with a view to, or for sale in connection with, any
distribution thereof, and (ii) agrees that it will not at anytime sell or
otherwise transfer, or permit the sale or other transfer of, such shares of
EyeCity Common Stock other than in transactions that are not in violation of the
Securities Act of 1933 or the provisions of any other applicable securities
laws, rules or regulations. Unless and until such time as those shares of
EyeCity Common Stock received by Impact hereunder are registered pursuant to the
Securities Act of 1933 (it being specifically acknowledged that EyeCity has no
obligation to so register such shares), EyeCity shall cause its transfer agent
to transfer such shares of EyeCity Common Stock as to which transfer is
requested by Impact only after receipt by EyeCity of an opinion of counsel
reasonably acceptable to EyeCity which opines that all of the requirements of
Rule 144
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of the Securities Act of 1933 have been satisfied in respect of such transfer.
(b) All certificates representing shares of EyeCity Common Stock to be
delivered to Impact under this Agreement shall bear the following legend:
"The securities represented hereby have not been registered under the
Securities Act of 1933, as amended, or under the securities laws of any
state and may not be sold, assigned, transferred, pledged or otherwise
disposed of except in compliance with, or pursuant to an exemption from,
the requirements of such Act or such laws."
8. (a) Impact and Xxxxxxx, jointly and severally, on the one hand, and
EyeCity, on the other hand, each agrees to indemnify and hold harmless the other
party and its directors, officers, employees and agents (the "Indemnified
Parties") against, and to reimburse the Indemnified Parties on demand with
respect to, any and all losses, liabilities, obligations, suits, proceedings,
demands, judgments, damages, claims, expenses and costs (including, without
limitation, reasonable fees, expenses and disbursements of counsel)
(collectively, "Losses") which the Indemnified Party may suffer, incur or pay by
reason of (i) the breach by such party of any representation or warranty made by
such party in this Agreement; (ii) the failure of such party to perform any
agreement required by this Agreement; (iii) the allegation by any third party of
the existence of any liability, obligation, lease, agreement, contract, other
commitment or state of facts which, if such allegation were true, would
constitute a breach by such party of any representation or warranty made such
party in this Agreement or of any covenant made by such party herein. In
addition, Impact and Xxxxxxx shall indemnify and hold harmless EyeCity in
respect of any Losses relating to any Liabilities.
(b) All prior or contemporaneous agreements, contracts, promises,
representations and statements, if any, among the parties hereto as to the
subject matter hereof, are merged into this Agreement. This Agreement, together
with all agreements, schedules, exhibits, documents and other instruments to be
attached hereto or delivered herewith sets forth the entire understanding
between the parties, and there are no terms, conditions, representations,
warranties or covenants other than those contained herein and in such
agreements, schedules, exhibits, documents and other instruments to be attached
hereto or delivered herewith.
(c) No term or provision of the Agreement may be amended, released,
discharged or modified in any respect except in writing signed by the party to
be charged and only to the extent therein set forth. No waiver shall be deemed
to be made by any of the parties to any of its rights hereunder unless that
waiver shall be in a writing signed by the waiving party and only to the extent
therein set forth.
(d) All notices, consents, demands or other communications required or
permitted to be given pursuant to the Agreement shall be in writing and shall be
delivered personally, by telecopy (with prompt confirmation by mail) during a
business day to the appropriate location listed as the address below, by United
States registered or certified first class mail, return receipt requested with
postage and fees prepaid, or by overnight courier. Such notices, consents,
demands or other communications shall be addressed respectively to Impact and
Xxxxxxx at 000 Xxxxx Xxxxx, Xxxxxx, Xxx Xxxx 00000 and 00 Xxxxxxxx Xxxxx, Xxxx
Xxxxxx, Xxx Xxxxxx 00000, in each case with a copy to Xxxxxx Xxxxxxxx, Esq.,
Xxxxxx, Xxxxxxx & Xxxxxxxx, 000 Xxxxx
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Xxxxx, Xxxxxx, Xxx Xxxx 00000 and to XxxXxxx.xxx, Inc., Xxx Xxxxxxxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxx 00000, Attn: Xxxx X. Xxxxx, with a copy to: Rosenman & Colin
LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxx X. Xxxxxx, Esq.,
or to any other address or telecopy number which such party may have
subsequently communicated to the other parties in writing. Except as otherwise
provided in this Agreement, any notice, consent, demand or other communication
given hereunder may be signed on behalf of a party by any duly authorized
representative of that party.
(e) This Agreement and any other agreement entered into in connection
herewith shall be governed by, and construed under and in accordance with, the
laws of the State of New York applicable to contracts made and wholly to be
performed therein by residents thereof, without giving effect to the conflict of
laws principles thereof. All actions or proceedings seeking the interpretation
and/or enforcement of this agreement shall be brought only in the state or
federal courts located in New York, all parties hereby submitting themselves to
the jurisdiction of such courts for such purpose. Any process in any action or
proceeding commenced in the courts of the State of New York arising out of any
claim, dispute or disagreement, may, among other methods, be served upon any
party by delivering or mailing the same, via registered or certified mail,
addressed to such party pursuant to Section 8(e) hereof. Any such delivery or
mail service shall be deemed to have the same force and effect as personal
service within the State of New York.
(f) If any term or provision of this Agreement, the application thereof to
any person, or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of the Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is held void or
unenforceable, shall not be affected thereby, and each term and provision of the
Agreement shall be valid and be enforced to the fullest extent permitted by law.
(g) The rights and remedies provided for in this Agreement are cumulative
and in addition to, and shall not restrict or limit, any other rights and
remedies available at law or in equity.
(h) Other than the parties hereto, no person shall have any rights under
or to enforce any provision of this Agreement.
(i) This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, administrators, executors, successors
and assigns; provided, however, that this Agreement may not be assigned by any
of the parties hereto other than by and among EyeCity and its subsidiaries.
(j) The Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute a single agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the ____ day of September, 1999.
XXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx
Title: President
IMPACT EYEWEAR, LLC
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Member
/s/ Xxxxxx Xxxxxxx
----------------------------------------
XXXXXX XXXXXXX
