ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made and entered
into as of this 21st day of September, 2007, by and among JMJ
Technologies, Inc. , a Georgia corporation having its principal
place of business at 2000 RiverEdge Drive, Suite GL 100A, Atlanta,
GA 30328 (" Seller "), WiFiMed Holdings Company, Inc.
, a Nevada corporation, having its principal place of business at
3320 Keenland Road, Marietta, Georgia 30062 (" Buyer
Parent Company "), and EncounterPRO Healthcare
Resources, Inc. , a Georgia Corporation having its principal
place of business at 2000 RiverEdge Drive, Suite GL 100A, Atlanta,
GA 30328 (" Buyer "). (Seller, Buyer Parent
Company, and Buyer are hereinafter referred to individually, as a "
Party ", collectively as the " Parties ." Buyer
and Buyer Parent Company are hereinafter referred to collectively
as the " Buyer Parties .") Capitalized terms used and
not otherwise defined herein have the meanings set forth in Article
1.
RECITALS
WHEREAS, Seller owns, operates and engages in the business
related to (i) the development, use, licensing, marketing,
implementation, training, maintenance, updating, support and error
correction of the Software (defined below) and (ii) the marketing,
implementation, training, and support of the hardware used to
operate the Software (the "Business");
WHEREAS, Seller desires to sell to Buyer and Buyer desires to
purchase from Seller substantially all of the assets and rights
used in or related to the operation or conduct of the Business on
the terms and conditions set forth in this Agreement (the
"Acquisition");
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree as
follows:
1
DEFINITIONS
For purposes of this Agreement, the following words, terms and
phrases, shall have the following meanings and terms elsewhere
defined in context shall have the meanings there assigned:
"Acquired Assets" shall have the meaning set forth in Section
2.1.
"Acquired Customer Contracts" means all of Seller's contracts
(including but not limited to oral, implied, and executory
contracts) with End-User Customers to deliver products and services
of the Business.
"Acquired Channel Partner Contracts" means all of Seller's
contracts with its Channel Partners to deliver products and
services of the Business.
"Acquisition" shall have the meaning set forth in the
recitals.
"Acquisition Shares" shall have the meaning set forth in Section
3.1.
"Adjustment Value" shall have the meaning set forth in Section
9.8.
"Ancillary Agreements" means the Bill of Sale attached hereto as
Exhibit A; the Officer's Certificates attached hereto as
Exhibits B and C ; duly authorized Warrants in
the form of Exhibit D ; a Note and Security Agreement
substantially in the form of Exhibit E; a Registration
Rights Agreement ("RRA") substantially in the form of Exhibit
F; and a Transition Agreement substantially in the form of
Exhibit G .
"Balance Sheet" has the meaning set forth in Section 4.2.
"BNA Note" refers to a loan to Seller from the Bank of North
Georgia evidenced by promissory note No. 16052-13 originally dated
4-08-05, together with extensions and renewals thereon.
"Bill of Sale" means the Bill of Sale, Assignment and Assumption
Agreement attached hereto a Exhibit A.
"Business" shall have the meaning set forth in the
recitals. Business of the Seller does not include any
warranties on hardware.
"Claim Notice" has the meaning set forth in Section 9.5.
"Channel Partners" means Seller's active resellers, value added
resellers, and distributors, as disclosed in Seller's Due Diligence
Postings.
"Closing" has the meaning set forth in Section 8.1.
"Closing Date" has the meaning set forth in Section 8.1.
"Competitive Restriction Rights" means all contractual or
common-law rights of Seller to prevent any of Seller's present or
former employees, consultants, independent contractors, business
associates, or prospective business associates from (a) competing
with the Business or engaging in a business competitive with the
Business as an employee, investor, consultant, etc.; (b) disclosing
any trade secrets or confidential information relating to the
Business; (c) violating any of Seller's Intellectual Property
rights; (d) soliciting on behalf of a business competitive with the
Business, any customer of the Business; or (e) soliciting for other
employment, any persons employed by the Business.
"Contemplated Transactions" means (a) the acquisition of the
Acquired Assets by Buyer from Seller and the payment of the
Purchase Consideration therefore; (b) the execution, delivery and
performance of the Ancillary Agreements, and (c) the performance by
the Parties of their other covenants and obligations under this
Agreement and the Ancillary Agreements.
"Dispute Notice" has the meaning set forth in Section 9.5.
"Due Diligence Postings" means the documents posted by Seller to
Buyer's ftp site: ftp.wifi-med.com and written documents
delivered to an officer or director of Buyer Parent Company prior
to the Closing Date. Any and all of Due Diligence Postings
shall be considered a disclosure by Seller to Buyer regardless of
the folder in which it was posted. All liens and security
interests that have been filed and are public records in the State
of Georgia and Cobb and Fulton Counties prior to the Closing Date
shall be deemed to have been communicated to the Buyer as though
they had been posted as a Due Diligence Posting.
"End-User Customer" means a medical practice, practitioner or
researcher who has a license to chart clinical data in
EncounterPRO® or to whom Seller is contractually obligated to
deliver a License to chart clinical data in EncounterPRO.
"GAAP" means United States generally accepted accounting
principles in effect from time to time, consistently applied.
"Governmental Entity" means: (i) any nation, state, county,
city, town, village, district or other jurisdiction; (ii) any
federal, state, local, municipal, foreign, or other government;
(iii) any federal, state, local or foreign governmental or
quasi-governmental authority of any nature (including any agency,
branch, department, board, commission, court or other tribunal);
(iv) any multi-national or supra-national organization or body; (v)
any body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power, including any court or
arbitrator; (vi) any self-regulatory organization or (vii) any
official of any of the foregoing.
"Indebtedness" means, with respect to any Person,
(i)
any obligation of such Person, contingent or otherwise, (A) for
borrowed money, (B) for all or part of the purchase price or cost
of any type of property or services, (C) evidenced by notes, bonds,
debentures or other similar instruments, (D) created or arising
under any conditional sale or other title retention agreement with
respect to real or personal property or other assets acquired by
such Person, (E) as lessee under leases that have been or should be
recorded as capital leases in accordance with GAAP, (F) under
acceptance, letter of credit or similar facilities, (G) to
purchase, redeem, retire, defease or otherwise acquire for value
any capital stock or other securities, (H) for accounts payable
other than trade accounts payable incurred in the Ordinary Course
of Business, (I) to reimburse any bank or other Person in respect
of amounts paid or payable under a standby letter of credit or (J)
in connection with any factored or sold receivables,
(ii)
all obligations (as described in clauses (i)(A) through (i)(J)
above) of others guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such
Person through an agreement (A) to pay or purchase such obligations
or to advance or supply funds for the payment or purchase of such
obligations, (B) to purchase, sell or lease (as lessee or lessor)
any real or personal property or other assets, or to purchase or
sell services, primarily for the purpose of enabling the debtor to
make payment of such obligations or to assure the holder of such
obligations against loss, (C) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for any
real or personal property or other assets or services irrespective
of whether such real or personal property or other assets is
received or such services are rendered) or (D) otherwise to assure
a creditor against loss and
(iii)
all obligations (as described in clauses (i)(A) through (i)(J)
above) secured by (or for which the holder of such obligations has
an existing right, contingent or otherwise, to be secured by) any
Lien on any real or personal property or other assets (including,
without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable
for the payment of such obligations.
"Indemnified Party" has the meaning set forth in Sections 9.5
and 9.6.
"Indemnifying Party" has the meaning set forth in Sections 9.5
and 9.6.
"Intellectual Property" means all trademarks and trademark
rights, trade names and trade name rights, service marks and
service mark rights, service names and service name rights, utility
models and utility model rights, copyrights, mask work rights,
brand names, trade dress, product designs, product packaging,
business and product names, logos, slogans, rights of publicity,
trade secrets, inventions (whether patentable or not), invention
disclosures, improvements, processes, formulae, industrial models,
processes, designs, specifications, technology, methodologies,
computer software (including all Source Code and object code),
firmware, development tools, flow charts, annotations, all
databases and data collections and all rights therein, any other
confidential and proprietary right or information, whether or not
subject to statutory registration, and all related technical
information, the information set forth in manufacturing,
engineering and technical drawings, know-how and all pending
applications for and registrations of patents, utility models,
trademarks, service marks and copyrights, and the right to sue for
past infringement, if any, in connection with any of the
foregoing.
"Interim Balance Sheets" has the meaning set forth in Section
4.2.
"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall
mean those facts which are actually known after due inquiry by the
president, chief financial officer, general counsel, or any or
senior manager of such Person.
"Law" means any law, statute, common law, rule, code, executive
order, ordinance, regulation, requirement, ruling or judgment of
any Government Entity or any order, writ, injunction or decree,
whether preliminary or final, entered by any Government Entity.
"Leased Real Property" has the meaning set forth in Section
4.17.
"License" means any agreement to which a Seller is a party that
entitles any other party (a "Licensee") to possess or use any of
the Software.
"Maintenance Obligations" means the contractual obligations owed
to End-User Customers in the Ordinary Course of Business of
Seller.
"Material Adverse Effect" means (a) with respect to Seller, any
change or effect (or aggregation of changes and effects) that is
materially adverse to (i) the financial condition, operations,
results of operations of the Seller's Business or (ii) the
condition of the Acquired Assets, and (b) with respect to Buyer,
any change or effect (or aggregation of changes and effects) that
is materially adverse to the financial condition, operations or
results of operations of the Buyer's business; provided, however
that, with respect to each of Buyer and Seller, changes in general
industry conditions or general economic conditions, and
consequences of acts of war or terrorism (and, in any such case,
which do not affect the Seller or Buyer, as the case may be,
disproportionately as compared to other companies that compete with
the Seller or Buyer, as the case may be) shall not be deemed to
constitute a Material Adverse Effect.
"Ordinary Course of Business" means, with respect to actions and
operations conducted by Seller, actions and operations that are (i)
consistent with the past practices of Seller, (ii) taken in the
ordinary course of the normal, day-to-day operations of Seller,
(iii) not required to be authorized by the board of directors or
other governing body of Seller, and (iv) similar in nature and
magnitude to actions and operations customarily taken, without any
authorization by the board of directors or other governing body of
Seller, in the ordinary course of the normal, day-to-day operations
of other companies that are of similar size and in the same line of
business as Seller.
"Proceeding" means any action, arbitration, hearing, charge,
investigation, litigation, or suit (whether civil, criminal,
administrative, or investigative) commenced, brought, conducted, or
heard by or before, or involving, any arbitrator or any federal,
state, municipal or other governmental department, commission,
board, bureau, agency, or instrumentality, domestic or foreign.
"Purchase Consideration" shall mean the purchase consideration
set forth in Section 3.1 of this Agreement.
"Seller's Loan with the Bank of North Georgia" means the
outstanding loan of approximately $250,000 that has been disclosed
to Buyer in Seller's Due Diligence Postings.
"Person" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a 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.
"Real Property Sublease" has the meaning set forth in Section
4.17.
"Software" means all executable code, object code and Source
Code versions of EncounterPRO® and integration products for
EncounterPRO heretofore including all versions, whether current or
past, thereof and all related user and programmer documentation,
user, configuration, or installation manuals, specifications, flow
charts, logic diagrams, bug reports and debugging reports,
development records and version integrity and change management
files, and including all graphic, video, audio or textual content
in any of the foregoing. EncounterPRO is an electronic health
record.
"Source Code" means any embodiment of any of the Software in the
form of a programming language that can be read by a suitably
trained human programmer (as opposed to object or executable code
or machine language), together with any programmer's comments
maintained by Seller with its copies of the programming-language
source code, and any linking, compiling and other instructions or
documentation necessary to enable competent programming
professionals to create executable code from the source code.
"Source Code License" means any contract or contractual
provision (whether or not denominated a "license") that prescribes
the terms, conditions and restrictions applicable to the possession
and use of Source Code by a licensee of the Software to whom Source
Code of any Software has been released.
"Tax" means any tax for any period with any taxing authority
(whether domestic or foreign).
"Third Party Claim" has the meaning described in Section
9.6.
"Trademarks" means all versions of the mark "EncounterPRO,"
together with any other marks, whether or not registered, used by
Seller as trademarks or service marks exclusively in connection
with the Software or the Software Business, including any logos or
other graphic representations thereof.
"Transactional Proposal" has the meaning described in Section
6.3.
"Warrants" has the meaning described in Sections 3.1 and
3.2.
"Warrant Shares" means the shares that are delivered when the
Warrants are executed.
2
ACQUISITION OF ASSETS AND LIABILITIES
2.1
Acquired Assets . Subject to the terms and conditions
set forth herein and to restrictions beyond Seller's control that
may arise by operation of law, Seller agrees to sell, convey,
transfer, assign and deliver to Buyer Parties (except for the
Excluded Assets as defined in Section 2.2 below), and Buyer Parties
agrees to purchase, all of Seller's rights, title and interest in
and to all of the rights and assets owned by Seller and used or
held for use in the operation of the Business, including without
limitation, the following ("collectively, the Acquired
Assets"):
2.1.1 All
intangible assets relating to the operation of the Business,
including, but not limited to, all Software; Intellectual Property
and other proprietary rights in the Software; all rights in the
Trademarks; all rights in any licenses held by Seller to
Intellectual Property of third parties that is used as a component
of the Software, or that is used as a Trademark; all the goodwill
in or arising from the use of the Trademarks and the operation of
the Business; and the originals of all Intellectual Property
registration and licenses;
2.1.2 All rights
under the Acquired Customer Contracts;
2.1.3 All rights
under the Acquired Channel Partner Contracts;
2.1.4 All
Competitive Restriction Rights of Seller;
2.1.5 All
accounts receivable of Seller;
2.1.6 All
tangible personal property used or held for use in the operation of
the Business, including all furniture, machinery, office
furnishings, equipment and equipment leasehold improvements
existing on the Closing Date;
2.1.7 All
authorizations and licenses necessary to operate the Business;
and
2.1.8 The Real
Property Sublease, including any and all security and other
deposits, advance rents and any other payments made thereunder
prior to the Closing Date.
2.2
Excluded Assets . Notwithstanding the terms of Section
2.1, the following assets shall be retained by Seller
(collectively, the "Excluded Assets") and shall not be sold,
transferred or assigned to Buyer in connection with the purchase of
the Assets:
2.2.1 All rights
to insurance proceeds under Seller's insurance policies to the
extent that such proceeds relate to liabilities that are retained
by the Seller;
2.2.2 All Tax
refunds, credits, and loss carryovers from any taxing authority
that currently belong to Seller or that may result from the future
filing of Tax Returns by the Seller;
2.2.3 To the
extent not required for the operation of the Business, Seller's
minute books and related company records and accounting records
(including ancillary records, paid invoices and work papers related
thereto) (provided that Seller shall provide Buyer access to the
foregoing records to the extent reasonably requested by Buyer);
2.2.4 The rights
of Seller under this Agreement and the Ancillary Agreements.
2.3
Excluded Liabilities . Except as set forth in Section
2.4, Buyer shall not assume or become liable for the payment of any
debts, liabilities, losses, Indebtedness, real or personal property
leases or obligations of Seller (collectively, the "Excluded
Liabilities"), including, any and all Liabilities arising from, or
related to, the ownership, operation and maintenance of the
Acquired Assets (including the Intellectual Property) prior to the
Closing Date.
2.4
Acquired Liabilities . As of the Closing Date, Buyer
shall assume, pay, and perform in accordance with their terms the
following liabilities of Seller:
2.4.1 All
liabilities and obligations to make monthly lease payments under
the Real Property Sublease that become due after the Closing
Date;
2.4.2 All
Maintenance Obligations of the Seller that are due to be performed
after the Closing Date;
2.4.3 All
executory contracts to deliver services and products of the
Business to Seller's End-User Customers that are due to be
performed after the Closing Date;
2.4.4 All
executory contracts to deliver services of the Business to Seller's
Channel Partners that are due to be performed after the Closing
Date;
3
CONSIDERATION AND DELIVERY
3.1
Purchase Consideration . The aggregate amount to be
paid for the Acquired Assets shall be:
Five Hundred Thousand Dollars ($500,000);
Warrants to purchase One Million Six Hundred Thousand Shares
(1,600,000) of Buyer Parent Company's $0.0001 par value common
stock (the "Warrants");
Shares of the common stock of Buyer Parent Company., equal to
12.5% of the fully-diluted outstanding shares of Buyer Parent
Company as of the Closing Date (the "Acquisition Shares");
and
Buyer Parties' promises set in Exhibits F (the Registration
Rights Agreement also known as the "RRA") and G (the Transition
Agreement).
3.2
Delivery of Purchase Consideration at Closing . At
Closing, the Purchase Consideration shall be paid by Buyer to
Seller as follows:
3.2.1 Buyer
Parties shall make a cash payment by wire transfer of immediately
available funds to such account or accounts as Seller shall
designate in the aggregate amount of Twenty-Five Thousand Dollars
($25,000);
3.2.2 Buyer
Parties shall deliver to Seller a Promissory Note for $475,000
dollars and a Security Agreement, substantially in the form of
Exhibit E attached hereto (the "Note");
3.2.3 Buyer
Parent Company shall deliver to Seller the Warrants substantially
in the form of Exhibit D;
3.2.4 Buyer
Parent Company shall deliver the Acquisition Shares to
Seller.
3.2.5 Buyer
Parties shall deliver to Seller a duly authorized and executed
Registration Rights Agreement substantially in the form of Exhibit
F.
3.3
Allocation . Following the Closing, Buyer shall submit
to Seller a proposed allocation of the Purchase Price (the
"Allocation"). The Allocation shall be subject to Seller's
reasonable approval, which approval cannot be unreasonably withheld
or delayed, provided, that Seller shall respond to Buyer regarding
such approval within fifteen (15) business days after receipt of
the Allocation. Upon Buyer's and Seller's agreement on the
basis of the allocation and that they shall not thereafter
take a Tax Return position inconsistent with such allocation unless
such inconsistent position shall arise out of or through an audit
or other inquiry or examination by the Internal Revenue Service or
other Taxing Authority.
3.4
Manner of Sale . The sale, conveyance, transfer,
assignment and delivery of the Acquired Assets by Seller to Buyer
shall be effected by the Bill of Sale and other deeds,
endorsements, assignments, transfers and other instruments of
transfer and conveyance in such form as Buyer or its counsel and
Seller or its counsel mutually deem reasonably necessary or
appropriate to transfer to the Buyer full legal and beneficial
title to the Acquired Assets.
3.5
Legending of Securities . The Acquisition Shares and the
Warrant Shares will be issued in a transaction exempt from
registration under the Securities Act of 1933, as amended (the
"Securities Act"), by reason of Section 4(2) thereof or Regulation
D promulgated thereunder or other applicable exemptions, together
with exemptions under applicable state securities laws. Seller
understands and agrees that there will be placed on the Acquisition
Shares a legend stating in substance the following (along with
other appropriate language under applicable U.S., state and foreign
securities laws):
The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, or any applicable state
securities laws and may not be offered, sold, transferred or
otherwise disposed of, unless registered with the Securities and
Exchange Commission of the United States and the securities
regulatory authorities of applicable states or unless an exemption
from registration is available.
3.6
Agreement to Cooperate . The parties agree to
reasonably cooperate to ensure that (1) the Acquisition Shares and
Warrant Shares are issued under available exemptions under
applicable U.S., state and foreign securities laws and (2) the
Contemplated Transaction shall constitute a valid, non-taxable
Asset Reorganization.
4
REPRESENTATIONS BY SELLER
Seller represents and warrants to Buyer as follows:
4.1
Organization and Qualification . Seller is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Georgia.
4.2
Authority Relative to this Agreement . Subject to
Shareholder approval, Seller has the requisite power and authority
to enter into this Agreement and the Ancillary Agreements and to
carry out its obligations hereunder and thereunder. This
Agreement has been duly executed and delivered to Seller and,
following approval by Seller's shareholders, constitutes a valid
and binding obligation of the Seller, enforceable according to
their respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, or other similar
Law relating to the rights of creditors generally and by general
principals of equity.
4.2
Financial Statements . Seller has provided Buyer with
audited financial statements, including a balance sheet, dated as
of December 31, 2005 (the "Balance Sheet"), a statement of profit
and loss from January 1, 2005 through December 31, 2005, and a
statement of cash flows from January 1, 2005 through December 31,
2005 (the "Cash Statements"). To Seller's Knowledge, the
Balance Sheet and Cash Statements have been prepared in accordance
with GAAP throughout the periods involved and present fairly in all
material respects the consolidated financial position, results of
operations, the assets and liabilities, and cash flows of Seller as
of the dates and for the periods indicated therein. In
its Due Diligence Postings, Seller has also provided Buyer with
QuickBooks-generated financial summaries including balance sheets
dated December 31, 2006 and July 26, 2007 (the "Interim Balance
Sheets") and statements of profit and loss for 2006 for the period
from January 1, 2007 through July 26, 2007 (the "Interim Cash
Statements"). To Seller's Knowledge (and except as may
be disclosed in Seller's Due Diligence Postings), the Interim
Balance Sheets and Interim Cash Statements fairly reflect the
financial status of the Seller in all material respects.
4.3
Litigation . To Seller's Knowledge, there are no
Proceedings pending or threatened against Seller, at law or in
equity.
4.4
Trademarks . The Due Diligence Postings set forth a
true, complete and accurate list of all U.S. and foreign
(i) trademark registrations, trademark applications and
Internet domain names and (ii) copyright and mask work
registrations and copyright and mask work applications owned by
Seller. Seller has no patents, patent pending or patent
applications. Except as disclosed in its Due Diligence
Postings, (i) Seller owns or has the right to use all
Intellectual Property free and clear of all liens and restrictions
and (ii) any Intellectual Property owned or used by Seller
and, to Seller's Knowledge, any other Intellectual Property owned
or used is valid and subsisting, is in full force and effect and
has not been cancelled, expired or abandoned.
4.5
Outstanding Licenses . To Seller's Knowledge and
except as disclosed in its Due Diligence Postings or made in the
Ordinary Course of Business of Seller, there are no outstanding
options, licenses, or agreements of any kind relating to the
Intellectual Property, nor is Seller bound by or a party to any
options, licenses or agreements of any kind with respect to
Intellectual Property of any other person or entity.
4.6
Infringement . To Seller's Knowledge, no third party
is misappropriating, infringing, diluting or violating any
Intellectual Property and no such claims, suits, arbitrations or
other adversarial proceedings have been brought or threatened
against any third party by Seller. Except as disclosed in its
Due Diligence Postings, to Seller's Knowledge, the conduct of
Seller's businesses as currently conducted does not misappropriate,
infringe upon (either directly or indirectly such as through
contributory infringement or inducement to infringe) or dilute any
Intellectual Property rights owned or controlled by any third
party.
4.7
Trade Secrets . To Seller's Knowledge, no Trade Secret
has been disclosed or authorized to be disclosed to any third party
other than pursuant to a written confidentiality and non-disclosure
agreement. To Seller's Knowledge, no party to any
non-disclosure agreement relating to its Trade Secrets is in breach
or default thereof.
4.8
Liens for Taxes . To Seller's Knowledge and except as
disclosed in Seller's Due Diligence Postings, there are no liens
for taxes upon any assets of Seller, except liens for taxes which
are not yet due and payable.
4.9
Audits . To Seller's Knowledge and except as disclosed
in its Due Diligence Postings, there are no federal, state, local
or foreign audits, actions, suits, proceedings, investigations,
claims or administrative proceedings relating to taxes or any tax
returns of Seller now pending, and Seller has not received any
written notice of any proposed audits, investigations, claims or
administrative proceedings relating to taxes or any tax
returns.
4.10 Written
Rulings . Seller has not received any written ruling from
any tax authority.
4.11 Tax Returns in
Other Jurisdictions . No jurisdiction where Seller does
not file a tax return has made a claim in writing that Seller is
required to file a tax return for such jurisdiction or that any
taxes are due as a result of doing any business in such
jurisdiction.
4.12 Federal
Tax Return . Seller has made available to the Buyer
true and correct copies of the United States federal income tax
return and any state, local or foreign tax return for its taxable
year ended December 31, 2005.
4.13 Accounts
Receivable . Except as disclosed in its Due Diligence
Postings, all accounts receivable of Seller, or valid obligations
of Seller; (i) have arisen from bona fide transactions during the
Ordinary Course of Business consistent with past practices; (ii)
are collected during and collectable during the Ordinary Course of
Business; and (iii) have been adequately reserved for on the
Balance Sheet and in the Interim Balance Sheets provided by Seller
its Due Diligence Postings. Buyer understands that support
payments made by Seller's customers are typically not true
"receivables" since the customer may opt not to receive support
services.
4.14 Consents,
Notices and Approvals . To Seller's Knowledge, except for
shareholder approval of this Agreement (and except as may be
indicated by Seller's Due Diligence Postings), no consent,
approval, permit, waiver, authorization of or notice or filing
with, any governmental authority is required to be made or obtained
by Seller in connection with the execution, delivery and
performance by Seller of this Agreement and the Ancillary
Agreements.
4.15 Assets
. Seller's Due Diligence Postings set forth a true, correct
and complete list of all tangible assets, properties and rights
owned, leased or licensed by Seller having a value in excess of
$25,000. All of the improvements, machinery and equipment
currently used in connection with the businesses of Seller are in a
condition sufficient to permit the operation and conduct of the
businesses of Seller as presently conducted, ordinary wear and tear
excepted.
4.16 Sufficiency of
Assets . The Acquired Assets include all of the material
assets, properties, interests and rights material to, or used for
the conduct of the Business of Seller as presently conducted.
Seller has such technology sufficient for the operations of its
Business as it is presently conducted. Seller has the right
to use all of the assets, properties, interests and rights used in
the conduct of the Business as presently conducted, notwithstanding
any Asset Liens on such assets, properties, interests and
rights.
4.17 Real Property
Sublease . In its Due Diligence Postings, Seller has made
available to Buyer a true, correct and complete copy of the Real
Property Sublease to its office space at RiverEdge Parkway.
Seller has no interest in any other real property. Seller
holds a good and valid leasehold interest to the Leased Real
Property, subject to the provisions of the Real Property
Sublease.
4.18 No
Commissions . Seller has no liability or obligation to
pay any finder's or broker's or agent's fees or commissions or
similar compensation in connection with the transactions
contemplated in this Acquisition Purchase Agreement.
5
REPRESENTATIONS BY BUYER PARTIES
In connection with this Acquisition Purchase Agreement, Buyer
Parties warrant and represent as follows:
5.1
Organization and Qualification . Buyer is a
wholly-owned subsidiary of Buyer Parent Company. Buyer Parent
Company is a corporation duly organized, validly existing and in
good standing under the laws of the state of its
incorporation.
5.2
Authority Relative to this Agreement . Each of Buyer
Parties has the requisite corporate power and authority to enter
into this Agreement and the Ancillary Agreements and to carry out
its obligations thereunder. The execution and delivery of
this Agreement and the Ancillary Agreements by Buyer Parties and
the consummation by Buyer Parties of the Contemplated Transactions
have been duly authorized by Buyer Parties, and no other corporate
proceedings, including, without limitation, any authorization by
the shareholders of Buyer Parent Company, or on the part of Buyer
Parties are necessary to authorize this Agreement, the Ancillary
Agreements or such transactions. This Agreement and the
Ancillary Agreements have each been duly executed and delivered by
Buyer Parties and each such agreement constitutes a valid and
binding obligation of each such entity, enforceable in accordance
with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization or other similar laws
relating to the enforcement of creditors' rights generally and by
general principles of equity. Neither of the Buyer Parties is
subject to, or obligated under, any provision of (a) its Articles
of Incorporation, or its Bylaws, (b) any agreement, arrangement or
understanding, (c) any license, franchise or permit or (d) any law,
regulation, order, judgment or decree, which would be breached, or
violated, or in respect of which a right of termination or
acceleration would arise or any encumbrance on any of its or any of
its subsidiaries' assets would be created, by its execution,
delivery and performance of this Agreement or Ancillary Agreements
and the consummation by it of the Contemplated Transactions.
Except for such filings to be made pursuant to
Corporate Law in order to effect the Acquisition Purchase and
federal and state securities laws, which Buyer agrees to make, no
authorization, consent or approval of, or filing with, any public
body, court or authority is necessary on the part of Buyer Parties
for the consummation by Buyer Parties of the transactions
contemplated by this Agreement and the Ancillary Agreements.
5.3
Validity of Stock . The Acquisition Purchase Shares
and Warrant Shares, when issued, shall: (i) be duly authorized,
validly issued, fully paid and non-assessable and free of liens and
encumbrances created by any person other than Buyer, and (ii) be
free and clear of any transfer restrictions, liens and encumbrances
except for restrictions on transfer under the Securities Act of
1933, as amended (the "Securities Act").
5.4
Financial Statements and SEC Filings . All filings
made with the Securities and Exchange Commission (the "SEC") from
and after September 30, 2006, are available on the SEC's EDGAR
database. (All such reports are collectively referred to
hereinafter as the "Buyer Parent Company Business Reports"; and the
financial statements, including the notes thereto, contained in the
Buyer Parent Company Business Reports are collectively referred to
hereinafter as the "Buyer Parent Company Financial
Statements.") Since September 30, 2006, Buyer Parent Company
has duly filed all reports required to be filed by it with the SEC
under the Securities Act and the Securities Exchange Act of 1934,
as amended, and except as disclosed in writing to Seller prior to
Closing, no such report, nor any report sent to Buyer Parent
Company's shareholders generally at the date it was filed or sent,
contained any untrue statement of material fact or omitted to state
any material fact required to be stated therein or necessary to
make the statements in such report, in light of the circumstances
under which they were made, not misleading. The Buyer Parent
Company Financial Statements included in the Buyer Parent Company
Business Reports were prepared in accordance with GAAP and present
fairly the consolidated financial position, results of operations,
and cash flows of Buyer Parent Company and its consolidated
subsidiaries as of the dates and for the periods indicated therein,
subject, in the case of unaudited interim statements, to normal
year-end accounting adjustments and the absence of complete
footnote disclosure.
5.5
Absence of Undisclosed Liabilities . Except as and to
the extent stated in the Buyer Parent Company Financial Statements
or the Buyer Parent Company Business Reports or except as disclosed
to Seller in writing prior to Closing, Buyer does not have any
material liabilities or obligations (whether accrued, absolute,
contingent, unliquidated, known, or otherwise), other than (i)
liabilities incurred in the Ordinary Course of Business and (ii)
obligations under contracts and commitments incurred in the
Ordinary Course of Business, which, in both subsections (i) and
(ii), individually or in the aggregate, are not material to the
financial condition or operating results of Buyer.
5.6
Litigation . Except as disclosed in writing to Seller
prior to Closing or in the Buyer Parent Company Business Reports,
there are no Proceedings against the Buyer Parties at law or in
equity.
5.7
No Liabilities of Buyer . Except for its obligations
under this Agreement, Buyer is not subject to any liabilities,
obligations or claims, whether absolute or contingent, liquidated
or unliquidated, known or unknown. Buyer was formed solely
for the purpose of consummating the transactions contemplated by
this Agreement and has not engaged in any business or other
activities for any other purpose.
5.8
Governmental Consents . No consent, approval, order or
authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state or local
governmental authority on the part of Buyer Parties is required in
connection with the consummation of the transactions contemplated
by this Agreement except filings with the Secretary of State of
Georgia, SEC and filings on Form 8-K.
5.9
Available Funds . On the Closing Date, Buyer Parties
will have sufficient funds on hand to enable them to consummate the
transactions contemplated hereby and to otherwise satisfy its
obligations under this Agreement and the Ancillary
Agreements.
5.10
Noncontravention . The execution, delivery, and
performance by Buyer Parties of this Agreement does not, and the
execution, delivery, and performance by Buyer Parties of the
transactions contemplated therein will not (i) violate any material
Law, order, or decree to which Buyer Parties are subject or (ii)
violate any material provision of the articles of incorporation,
bylaws or other governing documents of Buyer Parties.
6
ADDITIONAL AGREEMENTS
6.1
Expenses . Each of the Parties shall bear its own
expenses in connection with this Agreement and the transactions
contemplated herein.
6.2
Notification of Certain Matters . Prior to and on the
Closing Date, each of the Parties shall give prompt notice to the
others of (a) the occurrence or failure to occur of any event,
which occurrence or failure would be likely to cause any
representation or warranty on the part of any Party contained in
this Agreement to be untrue or inaccurate in any material
respect and (b) any failure of such party, or any officer,
director, shareholder, employee or agent thereof, to comply with or
satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder in any material respect.
6.3
No Solicitation . Seller agrees that, prior to the
Closing Date, it shall not, and shall not authorize or permit any
of Seller's directors, officers, employees, agents or
representatives to, directly or indirectly, solicit, initiate,
facilitate or encourage (including by way of furnishing or
disclosing information), or take any other action to facilitate,
any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to any Transaction Proposal (as
defined below), or enter into or maintain or continue discussions
or negotiate with any person or entity in furtherance of such
inquiries or to obtain a Transaction Proposal or agree to or
endorse any Transaction Proposal or authorize or permit any of its
officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative
retained by it to take any such action. "Transaction
Proposal" shall mean any of the following (other than the
transactions between Seller, Buyer Parties contemplated by this
Agreement) involving Seller: (i) any merger, consolidation, share
exchange, recapitalization, business combination or other similar
transaction; (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of ten percent (10%) or more of the
assets of Seller, in a single transaction or series of
transactions; (iii) any offer for, or the acquisition (or right to
acquire) of "beneficial ownership" by any person, "group" or entity
(as such terms are defined under Section 13(d) of the Securities
Exchange Act of 1934), of ten percent (10%) or more of the
outstanding shares of capital stock of Seller; or (iv) any public
announcement by Seller of a proposal, plan or intention to do any
of the foregoing or any agreement to engage in any of the
foregoing.
6.4
Access to Information; Confidentiality .
6.4.1
The Seller and Buyer Parties have had the opportunity to make a
complete due diligence review of the books, records, business and
affairs of the other.
6.4.2
Each of the Parties agrees that all non-public information provided
was treated as confidential, and if this Agreement is terminated,
will return to the other party all confidential documents (and all
copies thereof) in its possession, or will certify to the other
that all such documents not returned have been destroyed.
Further, regardless of whether this Agreement is terminated, each
party shall continue to hold all confidential information of the
other in strictest confidence. Non-public information shall
not include any information which a party can demonstrate: (i) was
already in such party's possession prior to negotiations related to
this transaction; (ii) is or becomes publicly and openly known and
in the public domain through no fault of such party; or (iii) is
received by such party in a non-confidential manner from a third
party having the right to disclose such information.
6.4.3
The Officers and Directors of Seller, and their immediate family
members shall not make any transactions in securities of Buyer
Parent Company while in possession of non-public information
relating to Buyer Parent Company, without the prior authorization
of counsel to Buyer Parent Company, as such transactions may
violate the federal securities laws and the regulations promulgated
thereunder.
6.5
Public Announcements . Before issuing any press
release or otherwise making any public statement with respect to
the Acquisition Purchase, Buyer Parties and Seller will
consult with each other as to its form and substance and shall not
issue any such press release or make any such public statement
prior to such consultation, except as may be required by Law (it
being agreed that the parties hereto are entitled to disclose all
requisite information concerning the transaction in any filings
required with the SEC).
7
CONDITIONS TO OBLIGATIONS OF THE PARTIES TO EFFECT THE ACQUISITION
PURCHASE.
The respective obligations of the Parties to effect this
Agreement and the Ancillary Agreements shall be subject to the
fulfillment at or prior to the Closing of the following
conditions:
7.1
There shall not be pending by or before any court or other
governmental body an order or injunction restraining or prohibiting
the transactions contemplated hereby;
7.2
Seller shall have obtained shareholder approval;
7.3
Buyer Parties shall have delivered to Seller (i) the Purchase
Consideration set forth in Sections 3.1 and 3.2 above, and (ii) a
duly authorized and executed Officer's Certificate in the form of
Exhibit C;
7.4
Seller shall have delivered to Buyer (i) a duly authorized and
executed Bill of Sale and (ii) a duly authorized and executed
Officer's Certificate in the form of Exhibit B;
7.5
All corporate and other proceedings in connection with the
transactions contemplated at the Closing and all documents incident
thereto shall be reasonably satisfactory in form and substance to
Seller's counsel, and Seller and its counsel shall have received
all such counterpart original and certified or other copies of such
documents as they may reasonably request.
8
CLOSING AND POST-CLOSING EVENTS
8.1
Time and Place . The closing of the Contemplated
Transactions (the "Closing") shall take place subsequent to a
meeting of the shareholders of Seller to approve this Agreement
(the "Closing Date"), at the offices of Seller in Atlanta, Georgia
or such other location agreed to by the Parties. The Closing
shall be effective as of 11:59 p.m. on the Closing Date, not later
than September 30, 2007.
9
INDEMNITIES
9.1
Seller's Agreement to Indemnify . Seller shall
indemnify Buyer Parties in the event that a third-party claim is
made against Buyer Parties for liabilities retained by the Seller
under this Agreement. Provided that the BNA Note has
been paid in full, Seller also agrees to indemnify Buyer Parent in
the event that Buyer Parent makes any payment to the Bank of North
Georgia on the BNA Note (including principal, interest, and loan
administration fees thereon).
9.2
Seller's Breach of Warranty . Seller shall indemnify
Buyer Parties and their former and current officers and directors
for damages resulting from any fraud by Seller, including
fraudulent warranties made by the Seller.
9.3
Buyer Parties' Agreement to Indemnify . Buyer hereby
agrees to indemnify Seller for any third-party claims brought
against Seller for breaches by Buyer of its duties to End User
Customers and Channel Partners.
9.4
Buyer Parties' Breaches . Buyer Parties shall
indemnify Seller and its former and current officers and directors
for damages resulting from Buyer Parties' fraud, including
fraudulent warranties made by Buyer Parties in this Agreement.
9.5
Indemnification Procedure . Upon the occurrence of any
claim for which indemnification is believed to be due under this
Agreement, other than any claim discussed in Section 9.7 below, the
party seeking indemnification (the "Indemnified Party") shall
provide notice of such claim (a "Claim Notice") to the party
(including each person who may be held jointly and severally liable
with such person) from whom indemnification is sought (the
"Indemnifying Party"). The Claim Notice shall state in
general terms the circumstances giving rise to the claim, specify
the amount of the claim (or an estimate thereof), and make a
request for any payment then believed due. A Claim Notice
shall be conclusive against such Indemnifying Party in all respects
30 days after receipt by the Indemnifying Party unless, within such
period, the Indemnifying Party sends the Indemnified Party a notice
disputing the propriety or amount of the claim (a "Dispute
Notice"). Any Dispute Notice shall describe the basis for
such objection and the amount of the claim that the Indemnifying
Party does not believe should be subject to indemnification.
Upon receipt of any Dispute Notice, the Indemnified Party and the
Indemnifying Party shall use reasonable efforts to cooperate and
arrive at a mutually acceptable resolution of the dispute within
the next 30 days. If a resolution is not reached within the
30-day period, either party may submit the dispute to arbitration
in accordance with Section 11.5. No claim for indemnification
against any person who may be jointly and severally liable with an
indemnifying Party shall be permitted unless and until such person
has received a Claim Notice and a 30 day period in which to send a
Dispute Notice.
9.6
Indemnification Procedure with Respect to Third Party Claims
. The following provisions shall govern claims by third
parties:
9.6.1
If any third party shall notify an Indemnified Party pursuant to
this Agreement with respect to any matter (a "Third Party Claim")
that may give rise to a claim for indemnification against any
Indemnifying Party, then the Indemnified Party shall promptly
notify each Indemnifying Party thereof in writing; provided,
however , that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying
Party from any obligation under this Agreement unless, and then
solely to the extent that, the Indemnifying Party is thereby
prejudiced;
9.6.2
The Indemnifying Party will have the right to defend the
Indemnified Party against a Third Party Claim with counsel of its
choice satisfactory to the Indemnified Party so long as: (i)
the Indemnifying Party notifies the Indemnified Party in writing
within a reasonable time after the Indemnified Party has given
notice of the Third Party Claim that the Indemnifying Party will
indemnify the Indemnified Party from and against the entirety of
any Losses the Indemnified Party may suffer that arise as a result
of or incident to the Third Party Claim; (ii) the Indemnifying
Party provides the Indemnified Party with evidence acceptable to
the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and
fulfill its indemnification obligations under this Agreement; (iii)
the Third Party Claim involves only monetary damages and does not
seek an injunction or equitable relief or involve the possibility
of criminal penalties; (iv) settlement of or adverse judgment with
respect to the Third Party Claim is not, in the good faith judgment
of the Indemnified Party, likely to establish a precedential custom
or practice adverse to the continuing business interests of the
Indemnified Party, and (v) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently;
9.6.3
So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Subsection 9.6.2, (i) the
Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party
Claim, (ii) the Indemnified Party will not consent to the entry of
any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnifying
Party (which will not be unreasonably withheld), and (iii) the
Indemnifying Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (which
will not be unreasonably withheld);
9.6.4
If or to the extent that any of the conditions set forth in
Subsection 9.6.2 is or becomes unsatisfied: (i) the
Indemnified Party may defend against, and consent to the entry of
any judgment or enter into any settlement with respect to, the
Third Party Claim and any matter it may deem appropriate in its
sole discretion and the Indemnified Party need not consult with, or
obtain any consent from, any Indemnifying Party in connection
therewith (but will keep the Indemnifying Party reasonably informed
regarding the progress and anticipated cost thereof); (ii) the
Indemnifying Party will reimburse the Indemnified Party promptly
and periodically for the cost of defending against the Third Party
Claim (including attorneys' fees and expenses); (iii) the
Indemnifying Party will remain responsible for any Losses the
Indemnified Party may suffer that arise as a result of or incident
to the Third Party Claim to the fullest extent provided in this
Section; and (iv) the Indemnifying Party shall be deemed to have
waived any claim that its indemnification obligations should be
reduced because of the manner in which counsel for the Indemnified
Party handled the Third Party Claim.
9.7
Satisfaction of Obligations . Subject to the following
sentence, if an indemnifying party becomes obligated to indemnify
another party with respect to any claim for indemnification
hereunder and the amount of liability with respect thereto shall
have been finally determined, the indemnifying party shall pay such
amount to the indemnified party within ten days following receipt
by the indemnifying party of written demand from the indemnified
party. The parties agree that except in case of fraud by the
Seller, that Buyer Parent Company's and Buyer's sole recourse
for satisfaction of any indemnification claims shall be by
asserting the claim against the undistributed Warrants or
Acquisition Shares which shall be valued at the Adjustment Value
set forth in Section 9.8 below.
9.8
Valuation of Warrant Shares and Acquisition Shares .
For adjustment purposes, the value per each Acquisition Share or
Warrant Share (the "Adjustment Value") shall be the weighted
average sales prices of all shares of Buyer Parent Company's common
stock as reported on the Over the Counter Bulletin Board or such
other exchange where Buyer Parent Company's shares may then be
trading during the nine (9) days preceding the Adjustment
Date. For purposes of Article 9, the Adjustment Date shall be
the Date when a Claim Notice is delivered by Buyer Parent Company
or Buyer to Seller.
9.9
Exclusive Remedy . Except in case of fraud or in cases
of non-performance of Buyer's and Buyer Parent Company's duty to
pay the Purchase Consideration or to perform its obligations under
the Ancillary Agreements, the rights and remedies provided for in
this Agreement (including the rights to indemnification) shall be
exclusive and no other rights and remedies that may exist at law or
in equity may be asserted against a party.
10 TERMINATION,
AMENDMENT AND WAIVER
10.1
Termination . This Agreement may be terminated at any
time prior to the Closing Date:
10.1.1 By mutual
consent of a duly authorized officer of Buyer Parties and
Seller;
10.1.2 By either
Seller or Buyer Parties if there is fraud with respect to a
material representation made by the other Party in connection with
this Agreement;
10.1.3 By either
Buyer Parties or Seller if the Acquisition shall not have been
consummated before October 3, 2007, or such later date as may be
agreed upon by the parties;
Provided, however, that no party shall have the right to
terminate this Agreement unilaterally if the event giving rise to
such right shall be primarily attributable to a breach of warranty
or to the fault of such party or to any affiliated party.
10.2 Effect of
Termination . In the event of termination of this
Agreement as provided in Section 10.1, this Agreement shall become
void and there shall be no liability or further obligation
hereunder on the part of Buyer Parties, Seller, or their respective
shareholders, officers or directors, except for liability arising
from fraud or a willful breach of this Agreement.
10.3 Amendment
. This Agreement may not be amended except by an instrument
in writing approved by the parties to this Agreement and signed on
behalf of each of the parties hereto.
10.4 Waiver
. At any time prior to the Closing Date, any party hereto may
(a) extend the time for the performance of any of the obligations
or other acts of any other party hereto or (b) waive compliance
with any of the agreements of any other party or with any
conditions to its own obligations, in each case only to the extent
such obligations, agreements and conditions are intended for its
benefit.
11 GENERAL
PROVISIONS
11.1 Notices
. All notices and other communications hereunder shall be in
writing and shall be sufficiently given if made by hand delivery,
by telecopier, by recognized overnight courier service, or by
registered or certified mail (postage prepaid and return receipt
requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by it by like
notice):
If to Buyer Parties:
Marshall Sterman
3320 Keenland Road
Marietta, Georgia 30062
If to Seller:
Kane St. John
2164 Pawnee Dr.
Marietta, GA 30067
With a copy to:
Gregory Vacca
15 White Pine Drive
Newport Coast, CA 92657
All such notices and other communications shall be deemed to
have been duly given: when delivered by hand, if personally
delivered; three business days after being deposited in the mail,
postage prepaid, if delivered by mail; the next business day, if by
recognized overnight courier service; and when receipt
acknowledged, if telecopied; provided, however, notice to a party's
attorney shall not constitute notice to such party.
11.2 Interpretation
and Construction . The headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
References to Articles, Sections and Subsections refer to articles,
sections and subsections of this Agreement unless otherwise
stated. Words such as "herein," "hereinafter," "hereof,"
"hereto," "hereby" and "hereunder," and words of like import,
unless the context requires otherwise, refer to this Agreement
(including the exhibits and attachments hereto). As used in
this Agreement, the masculine, feminine and neuter genders shall be
deemed to include the others if the context requires. 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.
11.3
Severability . The Provisions of this Agreement are
severable. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated and the parties shall negotiate in good
faith to modify this Agreement to preserve each party's anticipated
benefits under this Agreement.
11.4
Miscellaneous . This Agreement (together with all
other documents and instruments referred to herein): (a)
constitutes the entire agreement, and supersedes all other prior
agreements, representations, warranties and undertakings, both
written and oral, among the parties, with respect to the subject
matter hereof; (b) is not intended to confer upon any other person
any rights or remedies hereunder; and (c) shall not be assigned or
transferred by operation of law or otherwise, except that this
Agreement may be assigned by operation of law to any corporation
with or into which Buyer may be merged. This Agreement may be
executed in two or more counterparts, which together shall
constitute a single agreement.
11.5 Arbitration
and Choice of Law . The Parties agree to the following
arbitration and choice of law provisions:
11.5.1 The
parties agree to negotiate in good faith to resolve any dispute
between them regarding this Agreement. If the negotiations do
not resolve the dispute to the reasonable satisfaction of all
parties within 30 days, Subsection 11.5.2 shall apply;.
11.5.2 In the
event the parties are unable to settle a dispute between them
regarding this Agreement in accordance with subsection (a) above,
such dispute shall be resolved by binding arbitration to be held
exclusively in Fulton County, Georgia and such arbitration shall be
the Parties' exclusive remedy. Arbitration shall be conducted
in accordance with the then existing Commercial Dispute Resolution
Procedures of the American Arbitration Association. The
arbitration shall be conducted by three (3) arbitrators to be named
by the parties (the "Arbitrators"), consisting of one (1)
arbitrator named
