PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement"), made this 2nd day of
September, 1998, by and among X-CEED, INC., a Delaware corporation ("Buyer") and
WILLIAM N. ZABIT and JOYCE M. WESOLOWSKI (collectively, the "Sellers," and each
individually a "Seller"):
W I T N E S S E T H:
WHEREAS, the Sellers currently own all right, title and interest in the
marks set forth on Schedule 1 attached hereto, including but not limited to the
marks "Zabit," "Zabit & Associates, Inc." and "Z and device," together with the
United States Patent and Trademark Service Mark application thereto and the
goodwill represented thereby (the "Trademark"); and
WHEREAS, Buyer desires to purchase and each Seller desires to sell the
Trademark upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants and provisions
set forth in this Agreement, each Seller severally agrees with Buyer as follows:
ARTICLE I.
Purchase and Sale
A. Purchase and Sale. Upon the terms and conditions set forth in this
Agreement, each Seller shall sell, transfer and deliver all right, title and
interest in the Trademark to Buyer, and Buyer shall purchase the Trademark from
Sellers.
1.2 Transfer of Trademark. The transfer of the Trademark will be
effected on the terms set forth herein and by such bills of sale, endorsements,
assignments and other instruments of transfer in such form as shall be
sufficient to transfer the Trademark to Buyer, free and clear of all liens of
parties claiming an interest through each Seller, leases, security interests,
claims, charges and encumbrances and as shall be reasonably required by Buyer
and its counsel to vest good and marketable title to the Trademark in Buyer.
ARTICLE II.
Purchase Price and Payment
A. Purchase Price. The purchase price for the Trademark (the "Purchase
Price") shall be an aggregate amount of three million two hundred thousand
dollars ($3,200,000) to be paid to each Seller in the amounts set forth next to
each Seller's name on Exhibit A hereto.
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B. Payment. Buyer shall pay the Purchase Price on the Closing Date (as
defined in Section 6.1) by certified or bank check in New York Clearing House
(same day) funds or wire transfer to the Sellers' respective bank accounts in
accordance with the wire transfer instructions provided by Sellers.
ARTICLE III.
Representations, Warranties and Covenants of Sellers
Each Seller hereby represents and warrants to Buyer, with respect to
itself alone and not on behalf of any other Seller, that as of the date hereof
and as of the Closing Date:
A. Authority. Seller has the right, power, legal capacity and authority
to execute, deliver and perform his or her obligations under this Agreement and
the documents, instruments and certificates to be executed and delivered by such
Seller pursuant to this Agreement. The execution, delivery of, and performance
of the obligations contained in, this Agreement by such Seller and all
documents, instruments and certificates made or delivered by such Seller
pursuant to this Agreement, and the transactions contemplated hereby, have been
duly authorized by all necessary action on the part of Sellers.
B. Enforceability. The terms and provisions of this Agreement and all
documents, instruments and certificates made or delivered from time to time by
Seller hereunder and there under constitute valid and legally binding
obligations of Seller, enforceable against Seller in accor dance with the terms
hereof and thereof, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws and by general principles of
equity.
C. Approvals. The execution, delivery and performance of this Agreement
by Seller do not require any consent of, notice to or action by any person or
governmental authority which consent, notice or action has not been made, given
or otherwise accomplished and satisfactory evidence thereof has been delivered
to Buyer.
D. TITLE. Seller hereby represents and warrants that Seller has good
and marketable title to the Trademark, free and clear of any lien of parties
claiming an interest through each Seller, claim, encumbrance, mortgage or cloud
on clear and marketable title.
E. Proprietary Rights. To the knowledge of Sellers, the Trademark does
not infringe or misappropriate or otherwise violate or has not been alleged to
infringe, misappropriate or otherwise violate any proprietary rights of any
other person or entity, nor are Sellers alleged to be infringing upon, any
proprietary rights of any other person or entity. To the knowledge of Sellers,
no person or entity is engaged in any activity which would constitute
infringement of Sellers' rights in the Trademark. Sellers are not party to any
agreement to indemnify any other person or entity against any charge of
infringement of any proprietary right except customary vendor provisions
contained in software contracts.
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ARTICLE IV.
Representations and Warranties of Buyer
A. Organization and Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is authorized to transact business and is in good standing in each
state in which its ownership of assets or conduct of business requires such
qualification.
B. Authority. Buyer has the right, power, legal capacity and authority
to execute, deliver and perform its obligations under this Agreement and the
documents, instruments and certificates to be executed and delivered by Buyer
pursuant to this Agreement. The execution of, delivery of, and performance of
the obligations contained in, this Agreement by Buyer and all documents,
instruments and certificates made or delivered by Buyer pursuant to this
Agreement, and the trans actions contemplated hereby, have been duly authorized
by all necessary action on the part of Buyer and Buyer's shareholders.
C. Enforceability. The terms and provisions of this Agreement and all
documents, instruments and certificates made or delivered from time to time by
Buyer hereunder and thereunder constitute valid and legally binding obligations
of Buyer enforceable against Buyer in accordance with the terms hereof and
thereof, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws and by general principles of
equity.
D. Approvals. The execution, delivery and performance of this Agreement
by Buyer do not and will not require any consent of, notice to or any action by
any person or governmental authority which consent, notice or action has not
been made, given or otherwise accomplished and satisfactory evidence thereof has
been delivered to Sellers.
ARTICLE V.
Conditions of Sale
A. Conditions to Buyer's Obligations. Buyer's obligation to purchase
the Trademark shall be subject to the satisfaction of the following conditions,
any of which may be waived in writing by Buyer in whole or in part:
1. Upon payment by Buyer as contemplated hereunder, the Trademark shall
be free and clear of any and all liens, leases, security interests, claims,
mortgages and encumbrances of parties claiming an interest through each Seller.
2. Each Seller shall have delivered to Buyer a Bill of Sale,
substantially in the form of Exhibit B hereto, and each Seller shall have
performed whatever acts are reasonably required or appropriate to transfer to
Buyer the Trademark.
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3. The representations and warranties of Sellers contained in this
Agreement shall be true and correct and Sellers shall have performed or complied
with all covenants, agreements and conditions in this Agreement to be performed
or complied with by Sellers on or before the Closing.
B. Conditions to Seller's Obligations. Seller's obligation to sell the
Trademark shall be subject to the satisfaction of the following conditions, any
of which may be waived in writing by Sellers in whole or in part:
1. The representations and warranties of Buyer contained in this
Agreement shall be true and correct and Buyer shall have performed or complied
with all covenants, agreements and con ditions in this Agreement to be performed
or complied with by Buyer on or before the Closing.
2. Buyer shall have paid the Purchase Price.
ARTICLE VI.
Completion of Sale
The closing of the purchase and sale of the Trademark (the "Closing")
shall take place at the offices of Pillsbury Madison & Sutro LLP, 235 Montgomery
Street, San Francisco, California 94104, or at such other place as shall be
mutually agreeable to the parties hereto, but in no event later than the close
of business on September 3, 1998, promptly following the satisfaction or waiver
of the conditions specified in Article 5. The date of the Closing is herein the
"Closing
Date."
ARTICLE VII.
Termination
A. Termination Events. This Agreement may, by notice given prior to or
at the Closing, be terminated:
1. by either Buyer or Sellers if a material breach of any provision of
this Agreement has been committed by the other party and such breach has not
been waived;
2. (i) by Buyer if any of the conditions in Section 5.1 have not been
satisfied as of the Closing Date or if satisfaction of such a condition is or
becomes impossible (other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived such condition on or
before the Closing Date; or (ii) by Sellers, if any of the conditions in Section
5.2 have not been satisfied of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of Sellers to
comply with their obligations under this Agreement) and Sellers have not waived
such condition on or before the Closing Date;
3. by mutual consent of Buyer and Sellers;
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4. by either Buyer or Sellers if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement to
comply fully with its obligations under this Agreement) on or before September
3, 1998, or such later date as the parties may agree upon; or
5. by Sellers if the trailing five (5) day weighted average price of
shares of Buyer's Common Stock on the Nasdaq Small Cap Market or the Nasdaq
National Market, as the case may be, is less than six dollars ($6) at the close
of the business day preceding the Closing Date.
B. Effect of Termination. Each party's right of termination under
Section 7.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will not be an election
of remedies. If this Agreement is terminated pursuant to Section 7.1, all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Section 9.4 will survive; provided, however, that if
this Agreement is terminated by a party because of the breach of this Agreement
by the other party or because one or more of the conditions to the terminating
party's obligations under this Agreement is not satisfied as a result of the
other party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
ARTICLE VIII.
Indemnification; Remedies
A. Survival; Right to Indemnification not Affected by Knowledge. All
representations, warranties, covenants, and obligations in this Agreement, and
any other certificate or document delivered pursuant to this Agreement will
survive the Closing and shall terminate at the close of business sixteen (16)
months following the Closing Date. The right to indemnification, payment of
Damages (as defined below) or other remedy based on such representations,
warranties, covenants, and obligations will not be affected by any investigation
conducted with respect to, or any knowledge acquired (or capable of being
acquired) at any time, whether before or after the execution and delivery of
this Agreement or the Closing Date, with respect to the accuracy or inaccuracy
of or compliance with, any such representation, warranty, covenant, or
obligation. The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations, warranties, covenants,
and obligations.
B. Indemnification and Payment of Damages by Sellers. Sellers,
severally, will indemnify and hold harmless Buyer for, and will pay to the Buyer
the amount of, any loss, liability, claim, damage (including incidental and
consequential damages), expense (including costs of investigation and defense
and reasonable attorneys' fees) or diminution of value, whether or not involving
a third-party claim (collectively, "Damages"), arising from or in connection
with any breach of any representation or warranty made by Sellers in this
Agreement or any other certificate or document delivered by Sellers pursuant to
this Agreement.
The remedies provided in this Section 8.2 will be the exclusive remedy available
to Buyer.
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C. Indemnification and Payment of Damages by Buyer. Buyer will
indemnify and hold harmless Sellers, and will pay to Sellers the amount of, any
Damages arising from or in connection with any breach of any representation or
warranty made by Buyer in this Agreement or in any certificate delivered by
Buyer pursuant to this Agreement.
D. Procedure for Indemnification -- Third Party Claims.
1. Promptly after receipt by an indemnified party under Section 8.2 or
8.3 of notice of the commencement of any proceeding against it, such indemnified
party will, if a claim is to be made against an indemnifying party under such
Section, give notice to the indemnifying party of the commencement of such
claim, but the failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates that the defense
of such action is prejudiced by the indemnifying party's failure to give such
notice.
2. If any proceeding referred to in Section 8.4(a) is brought against
an indemnified party and it gives notice to the indemnifying party of the
commencement of such proceeding, the indemnifying party will be entitled to
participate in such proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such proceeding and the indemnified party
determines in good faith that joint representation would be inappropriate, or
(ii) the indemnifying party fails to provide reasonable assurance to the
indemnified party of its financial capacity to defend such proceeding and
provide indemnification with respect to such proceeding), to assume the defense
of such proceeding with counsel satisfactory to the indemnified party and, after
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such proceeding, the indemnifying party will not, as long
as it diligently conducts such defense, be liable to the indemnified party under
this Section 8 for any fees of other counsel or any other expenses with respect
to the defense of such proceeding, in each case subsequently incurred by the
indemnified party in connection with the defense of such proceeding, other than
reasonable costs of investigation. If the indemnifying party assumes the defense
of a proceeding, (i) it will be conclusively established for purposes of this
Agreement that the claims made in that proceeding are within the scope of and
subject to indemnification; (ii) no compromise or settlement of such claims may
be effected by the indemnifying party without the indemnified party's consent;
and (iii) the indemnified party will have no liability with respect to any
compromise or settlement of such claims effected without its consent. If notice
is given to an indemnifying party of the commencement of any proceeding and the
indemnifying party does not, within ten (10) days after the indemnified party's
notice is given, give notice to the indemnified party of its election to assume
the defense of such proceeding, the indemnifying party will be bound by any
determination made in such proceeding or any compromise or settlement effected
by the indemnified party.
E. Procedure for Indemnification -- Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
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ARTICLE IX.
Miscellaneous
A. Further Assistance. Each Seller shall at its own expense, upon the
request of Buyer, do, execute, acknowledge and deliver, and cause to be done,
executed, acknowledged and delivered, all such further acts or instruments as
may be required to effect or better transfer, convey and assign to Buyer the
Trademark or to vest in Buyer good, valid and marketable title to the Trademark
and carry out the purposes of this Agreement, including the filing of all
necessary notices, forms and applications with the United States Patent and
Trademark Office.
B. Notices. Any notice or demand desired or required to be given
hereunder shall be in writing and deemed given when personally delivered, sent
by telecopier, overnight courier or deposited in the mail, postage prepaid, sent
certified or registered, return receipt requested, and addressed as set forth
below or to such other address as any party shall have previously designated by
such a notice. Any notice so delivered personally or by telecopy shall be deemed
to be received on the date of delivery or transmission by telecopier; any notice
so sent by overnight courier shall be deemed to be received one (1) business day
after the date sent; and any notice so mailed shall be deemed to be received on
the date shown on the receipt. Rejection or other refusal to accept or inability
to deliver because of a change of address of which no notice was given shall be
deemed to be receipt of the notice.
If to Buyer:
X-ceed, Inc.
488 Madison Avenue
New York, New York 10022
Attn: Werner Haase
Facsimile: (212) 308-0640
with a copy to:
McLaughlin & Stern LLP
260 Madison Avenue
New York, New York 10016
Attn: Richard Blumberg, Esq.
Facsimile: (212) 448-0066
If to Sellers:
To the address set forth for such Seller on Exhibit A hereto.
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with a copy to:
Pillsbury Madison & Sutro LLP
235 Montgomery Street
San Francisco, CA 94104
Attn: Gregg Vignos, Esq.
Facsimile: (415) 983-1200
C. Assignment. Buyer may not assign or transfer in any manner its
rights under this Agreement without the prior written consent of Sellers.
Subject to such assignment, this Agreement benefits and binds Sellers and Buyer
and their respective heirs, personal representatives, successors and assigns.
D. Costs. Each party shall bear its own costs associated with this
transaction (including but not limited to attorneys' and brokers' fees and
expenses) and any closing costs.
E. Entire Agreement. This Agreement and the Exhibits attached hereto
constitute the entire agreement among Sellers and Buyer with respect to the
Trademark and supersedes all prior agreements, oral or written, relating
thereto.
F. Governing Law. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of Delaware, without regard to principals
of conflicts of law.
G. Waivers; Amendment. No waiver by any party of any provision hereof
shall be deemed a waiver of any other provision hereof or of any subsequent
breach by any party of the same or any other provision. This Agreement may be
amended only by a writing executed by both parties hereto.
H. Survival. Anything to the contrary in this Agreement
notwithstanding, all representations and warranties of the parties made in this
Agreement and the provisions of Section 9.4 hereof, shall survive and continue
after any termination of this Agreement and the Closing hereunder.
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I. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. For purposes of executing
this Agreement, the parties agree that facsimile signatures are acceptable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BUYER:
X-CEED, INC., a Delaware corporation
By /s/ Werner G. Haase
Name Werner G. Haase
Title Chief Executive Officer
SELLERS:
/s/ William N. Zabit
William N. Zabit
/s/ Joyce M. Wesolowski
Joyce M. Wesolowski
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EXHIBIT A
Seller Purchase Price
William N. Zabit $2,560,000
21 Newhall
San Rafael, CA 94901
Purchase Price
Joyce M. Wesolowski $ 640,000
506 Sausalito Avenue
Sausalito, CA 94965
EXHIBIT B
BILL OF SALE AND GENERAL ASSIGNMENT
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is
hereby acknowledged, ____________________ ("Seller"), does hereby sell, assign,
transfer and deliver to X-CEED, INC., a Delaware corporation ("Buyer"), its
successors and assigns, all of Seller's right, title and interest in and to the
Trademark as that term is defined in that certain Purchase Agreement dated as of
September __, 1998 (the "Purchase Agreement"), by and between Seller, and
certain other parties.
TO HAVE AND TO HOLD, the same unto Buyer, its successors and assigns,
forever.
The sales and assignments made hereunder are made in accordance with and
subject to the representations, warranties, covenants and provisions contained
in the Purchase Agreement.
Seller shall at its own expense, upon the request of Buyer, do, execute,
acknowledge and deliver, and cause to be done, executed, acknowledged and
delivered, all such further acts or instruments as may be required to effect or
better transfer, convey and assign to Buyer the Trademark or to vest in Buyer
good, valid and marketable title to the Trademark and carry out the purposes of
the Purchase Agreement.
Seller hereby represents and warrants that Seller has good and
marketable title to the Trademark, free and clear of any lien, claim,
encumbrance, mortgage or cloud on clear and marketable title of parties claiming
an interest through Seller (other than Buyer or any party claiming an interest
through Buyer or for any taxes agreed to be paid by Buyer under the Trademark
Leases).
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IN WITNESS WHEREOF, Seller has caused this Bill of Sale and General
Assignment to be executed and delivered by a duly authorized officer as of this
____ day of September, 1998.
SELLER:
[Signature]
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